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JNCLASSIFIED  • 


•51 


V < I/-: 

\ \ . 


Report  of 


Atlantic  City  Conference 


on 


Workmen's  Compensation  Acts. 


July  - - 1909 


Copies  may  be  had  from  the  Secretary,  H.  V.  Mercer, 
at  fifty  cents  each. 

Minneapolis,  Minn. 


Univ.Gf  in.  Library 
51 


Report  of 

Atlantic  City  Conference 


on 

Workmen’s 
Compensation  Acts 


Held  at 


Atlantic  City,  N.  J. 
July  29-31,  1909 


Prefatory  Note 


The  enclosed  proceedings  were  the  result  of  a conference  held  at 
Atlantic  City,  N.  J.,  called  on  the  initiative  of  the'Minnesota  Employees’ 
Compensation  Commission,  and  to  which  the  Commissioners  of  various 
states  interested  in  the  same  problem,  as  well  as  certain  government  officials 
and  others,  including  the  Russell  Sage  Foundation,  and  many  insurance 
companies,  employers  and  labor  officials  were  asked  to  be  present  in 
response  to  the  following  invitation: 


To 


You  are  invited  to  be  present  at  The  Marlborough-Blen- 
heim,  at  Atlantic  City,  July  29-31  and  take  part  in  a conference 
with  the  various  State  and  Government  officials  and  others, 
interested  in  legislation  changing  the  basis  of  recovery  for  in- 
juries received  in  the  course  of  employment  from  that  of  negli- 
gence or  fault  of  the  employer,  to  that  of  risk  of  the  industry  or 
insurance;  at  which  conference  the  persons  whose  names  appear 
under  the  several  subjects  will  be  asked  to  lead  the  discussions 
along  the  respective  lines  appearing  in  the  program  herein. 

You  are  requested  to  extend  this  invitation  to  such  persons 
as  can  contribute  knowledge  on  the  subject.. 

Yours  truly, 

H.  V.  Mercer,  Chairman 

Minnesota  Employees’  Compensation  Commission, 


Minneapolis 


■ 


PROGRAM 


WORKMEN’S 

COMPENSATION  ACTS  CONFERENCE, 
ATLANTIC  CITY,  JULY  29-31,  1909. 


1.  DESIRABILITY 

Prof.  John  R.  Commons,  Madison,  Wis. 

Hon.  Chas.  P.  Neill,  Washington,  D.  C. 

Hon.  Geo.  W.  Smith,  Buffalo,  N.  Y. 

GENERAL  DISCUSSION 


II.  POSSIBILITY 

Hon.  P.  T.  Sherman,  New  York  City,  N.  Y. 

Hon.  A.  W.  Sanborn,  Ashland,  Wis. 

GENERAL  DISCUSSION 


111.  PRACTICABILITY 


Hon.  E.  E.  Clarke, 

Dr.  Lee  K.  Frankel, 
Hon.  John  Mitchell, 
Hon.  W.  E.  McEwen 
Hon.  W.  B.  Dickson, 
Hon.  Miles  M.  Dawson, 


Washington,  D,  C. 
New  York  City,  N.  Y. 
New  York  City,  N.  Y. 

St.  Paul,  Minn. 
New  York  City,  N.  Y. 
New  York  City,  N.  Y. 


GENERAL  DISCUSSION 


I 

^he  results  of  the  meeting  were  very  gratifying  to  those,  who  promot- 
ed the  conference  and  all  seemed  well  pleased  with  the  results.  An 
executive  committee  was  appointed  with  power  to  act  with  respect  to  a future 
meeting. 


The  Minnesota  Commissioners  desire  to  express  their  appreciation  of 
the  valuable  assistance  and  counsel  of  all  who  were  present,  and  especially 
"to  those  who  SO  9bly  assisted  in  the  discussions. 


Secretary’s  Report  of  Proceedings 


Pursuant  to  invitation  of  the  ^linnesota  Employees’ 
Compensation  Commission,  a conference  was  held  at  tlie 
Marlboroug’li-Plenlieim,  Atlantic  City,  New  Jersey,  July 
29-30,  1909,  the  following  named  persons  being  in  attend- 
ance : 

Elaine,  John  J.,  Boscohcl,  Wis. 

‘ Member  of  Wisconsin  Committee  on  Thdustrial 
Insurance.  Lawyer. 

Chaney,  Lucian  IV.,  Washington,  D.  C. 

Eureau  of  Labor.  . 

COHLETT,  AV.  A\\,  New  York,  N.  Y. 

Dawson,  AFiles  .M.,  New  York,  N.  Y. 

Actuary. 

Faxan,  AA'alteu  C.,  Hartford  Conn. 

A"ice-President  Aetna  Life  Insurance  Co., 

Accident  and  Liability  Department. 

Fkankel,  Lee  K.,  New  York  City. 

Gillette,  George  AI. 

A1  ember  Alinnesota  Employees’  Compensation 
Commission. 

Ingalls,  Wallace,  Racine,  Wis. 

Alember  AAusconsin  Committee  on  Industrial  In- 
surance. Lawj^er. 

Lyman,  T.  U.,  Hartford,  Conn. 

Travelers’  Insurance  Co. 

AIcEwen,  AV.  E.,  St.  Paul,  Minn. 

Commissioner  of  Labor.  Alember  Alinnesota  Em- 
ployees’ Compensation  Commission. 


Mekcek^,  H.  V.,  Minneapolis,  Minn. 

Member  ^linuesota  Employees’  Compensation 
Commission.  Lawyer. 

MolonY;,  J.  K.,  Hartford,  Conn. 

Aetna  Life  Insurance  Co., 

Accident  and  Liability  Department. 

Moore^  Franklin  J.,  Philadelphia , Pa. 

U.  kS.  Manager  The  General  Accident  Assurance 
Corporation,  Limited,  of  rertb,  Scotland. 

Neill^  Charles  F.,  Washinyton , D.  C. 

United  States  Commissioner  of  Labor. 

Parsons,  A.  AV.,  Heio  York  Ciiif. 

Fidelity  and  Casualty  Co. 

Petr  ASCI  I,  Carl  S.,  Hew  York  Cliy, 

United  States  Casualty  Co.  Lawyer. 

Reid,  A.  Duncan,  Heio  York,  N.  Y. 

Ocean  Accident  and  GuaranU^  Co.  of  London, 
England. 

Rorertson,- W.  Spencer,  New  York  City, 

30  Church  St. 

Rowe,  J.  Scofield,  Hartford,  Conn. 

Secretary  Aetna  Life  Insurance  Co., 

Accident  and  Liability  Department. 

SeaCtEr,  Henry  R.,  New  York,  N.-Y. 

Member  New  York  State  Commission. 

Professor  Columbia  University. 

Smith,  George,  Buffalo,  N.  Y. 

Member  New  York  State  Commission.  Lacka- 
wanna Steel  Co. 

Stone,  John  T.,  Baltimore,  Md. 

President  Maryland  Casualty  Co 


3 


Waller^  J.  T.,  Atlanta^  Ga. 

Liability  Insurance. 

Watrous,  Paul  J.,  Milioaulvee^  Wis. 

Secretary  Wisconsin  Committee  on  Industrial  In- 
surance. 

iMr.  Mercer:  Gentlemen,  the  time  has  come  when  we 

slionld  open  our  meeting,  I suppose.  As  the  object  of  it 
is  stated  on  tlie  program,  you  are  all  more  or  less  familiar 
v/itli  it,  and  I think  it  is  unnecessary  to  make  any  pre- 
liminary statement.  You  will  need  a chairman  for  the 
meeting,  and  I suggest  that  nominations  are  now  in  order. 

Mr.  Daicson:  I nominate  Mr.  Neill  to  be  chairman  of 

the  conference. 

Mr.  NeiJl : I will  ask  Mr.  Dawson  to  withdraw  my  nomi- 
nation. I may  not  be  able  to  remain  longer  than  two  days. 
I put  in  nomination  Mr.  Mercer;  he  has  organized  this 
plan  of  work. 

il/r.  Gillette:  I trust  that  Mr.  Dawson  'will  not  insist 

upon  his  nomination  being  withdrawn. 

Mr.  Dawson:  I feel  that  this  is  possibly  only  the  be- 

ginning of  meetings  which  must  be  held,  and  conferences 
which  must  take  place,  before  this  matter  ps  finished.  And 
I feel  that  if  Mr.  Neill  will  act  as  chairman  it  would  lend 
dignity  and  confidence  to  this  undertaking.  I hope  very 
much  that  he  will  take  not  only  the  chairmanship  of  this 
meeting  but  the  permanent  chairmanship  of  this  confer- 
ence. 

Mr.  Mercer:  Gentlemen,  I think  I ought  to  say  that 

Mr.  Dawson  and  I talked  this  matter  over  a moment  ago, 
and  yve  thought  it  better  that  Mr.  Neill  should  be  chair- 
man. I hope,  under  the  circumstances,  that  Mr.  Neill  will 
act,  and  that  the  sno'gestion  of  my  name  will  be  withdravni. 


4 


Mr.  Neil : If  you  feel  that  way,  Mr.  Mercer,  after  what 
Mr.  Dawson  has  said  I will  withdraw  what  I said. 

71/r.  Mercer:  Thank  you.  All  in  favor  of  Mr.  Neill  will 
please  make  it  known  by  saying  aye.  It  is  unanimous,  and 
Mr.  Neill  is  chairman  of  tlie  meeting. 

Mr.  II  -V.  Mercer  of  Minneapolis  was  nominated  to  be 
secretary  of  tlie  conference.  Tliere  were  no  further  nomi- 
nations, and  Mr.  ]\[ercer  was  unanimously  elected  to  act 
as  such  secretary. 

71/r.  Datvson  : Mr.  Chairman,  I would  ask  that  Mr.  W. 
M.  Higgins  of  Minneapolis  take  tlie  notes  of  our  meetings. 
I can  then  adopt  them  in  my  report. 

The  Chairman : Without  objection,  it  will  be  so  ordered. 
It  is  so  ordered. 

Is  there  anything  further  connected  with  the  comple- 
tion of  the  organization?  If  not,  we  can  take  up  the  first 
topic  on  the  program,  the  desirability  of  workmen’s  com- 
pensation acts. 

Have  you  any  news  from  Prof.  Commons? 

Mr.  Mercer:  Prof.  Commons  at  first  indicated  that  he 
could  come.  But  I had  a letter  from  him  a day  or  two 
before  leaving  home,  saying  that  on  account  of  certain 
work  that  was  rushing  him,  that  he  was  getting  out  for 
publishers,  it  would  be  absolutely  impossible  for  him  to 
be  here.  He  sent  his  regrets.  He  is  thoroughly  in  sym- 
pathy with  the  meeting. 

The  Chairman : I see,  gentlemen,  that  my  name  is  sec- 
ond on  the  list.  Simply  for  the  purpose  of  opening  the 
discussion,  I will  say  a very  few  words. 

It  has  seemed  to  me  that  on  the  question  of  desirability 
of  compensation  legislation  there  could  not  be  two  sides. 
I believe  that  on  most  questions  there  are  two  sides.  This 
is  one  of  the  few  subjects  in  the  domain  of  industrial  leg- 


o 


islation  that  it  seems  to  me  is  not  open  to  any  discussion  as 
to  its  desirability.  The  question  is,  as  to  how  it  can  be 
brought  about  and  what  particular  plan  may  be  the  best. 

We  stand  today  the  only  important  industrial  country 
in  the  world  that  has  not  adopted  tliis  principle.  In  the 
matter  of  liability  for  industrial  accidents"  we  are  still  fol- 
lowing a principle  in  x\nierican  law  which  was  English  in 
its  origin.  It  does  not  represent  the  intelligence  nor  the 
wisdom  nor  the  deliberate  conviction  of  any  body  of  men 
who  had  given  thought  or  study  to  the  subject.  It  repre- 
sents tlie  accidental  decision  of  a single  judge,  a decision 
which  it  is  not  too  much  to  say — was  a parody  on  logic  and 
a travesty  on  justice.  Tlie  original  decision  fixing  the  limi- 
tations on  tlie  principle  of  employers’  liability  (which  is 
still  the  basis  of  most  of  our  American  law)  was  rendereo 
at  a time  after  the  industrial  revolution  had  thoroughly  es- 
tablished itself;  when  production  on  a very  large  scale  was 
already  in  evidence  on  every  hand.  The  English  judge  who 
made  That  law  for  the  succeeding  seventy-five  years,  con- 
fessedly based  the  decision  on  the  absurd  results  that 
would  have  folloAved  from  a contrary  decision.  It  Avas 
purely  a question  of  expediency.  EA^erj^  illustration,  Avith- 
out  exception,  that  he  made  to  sIioaa^  the  absurdity  that 
Avonld  follow  from  a contrary  ruling  was  based  on  do- 
mestic service;  a domestic  service  Avhich  Avould  probably 
form  one  case  in  fiA^e  hundred  liable  to  come  up  for  con- 
sideration under  the  decision  that  he  Avas  making.  The  de- 
velopment of  that  decision  became  so  absurd  that  England 
itself  threw  it  over.  And  today,  as  I said  in  the  beginning, 
the  United  States  is  the  only  chdlized  industrial  country 
which  places  the  burden  of  risk  upon  the  individual  em- 
ploye. It  has  bee  said  in  regard  to  the  assumption  of 
risk  by  the  employe,  that  the  judge  wrote  a clause  into  the 


6 


supposed  labor  contract,  which  neither  side  up  to  that 
time  had  ever  dreamed  was  there,  and  Avhich  up  to  tlie  pres- 
ent time  neither  side  lias  been  able  to  thoroughly  under- 
stand. 

The  situation  in  a nutshell  seems  to  be  tliis:  There  are 
inevitable  risks  in  almost  every  line  of  occupation.  The 
employer  may  exercise  every  possible  precaution — not  only 
ordinary  diligence  but  extraordinary  diligence;  the  work- 
man may  do  tlie  same;  and  in  spite  of  that,  industry  takes 
its  inevitable  toll  year  after  year,  month  after  month,  day 
after  day,  and  even  hour  after  hour.  I know  of  a single  in- 
dustry (a.  small  industry,  employing  probably  at  this  time 
less  tlian  one  liundred  and  fifty  thousand  men)  whose  an- 
nual toll  is  over  seven  liundred  human  lives;  and  the 
maimed  and  injured  number  several  times  that,  every  year, 
and  many  of  those  maimed  are  maimed  for  life.  Yet,  under 
our  system  of  law,  the  families  of  the  great  majority  of 
these  seven  hundred  men  could  not  collect  any  form  of  dam- 
ages. Here  is  an  inevitable  sacrifice  of  human  life  in* order 
that  the  consumers  of  that  commodity  may  have  what  they 
desire.  The  entire  burden  of  that  loss  somebody  has  to 
bear;  it  is  borne  somewhere.  The  entire  burden  is  thrown 
upon  those  least  able  to  bear  it — the  families  of  the  vic- 
tims. 

Now,  I think  the  title  ^^workmen’s  compensation”  is  good, 
at  this  point,  because  it  gets  away  from  the  phrase  ^^em- 
ployers’ liability.”  The  term  ^^employers’  liability”  seems 
to  assume  that  in  some  way  the  employer  should  be  penal- 
ized for  these  losses ; should  be  made  himself  in  some  way 
to  bear  the  cost.  That  is  a mistaken  notion.  Whatever 
he  may  be  legally,  or  whatever  he  may  be  morally,  the  em- 
ployer, in  modern  civilization,  is  simply  an  agent  who 
stands  between  the  producer  (in  the  sense  of  the  man  who 


does  the  manual  labor)  and  the  ultimate  consumer.  In 
ether  words,  the  employer  collects  from  the  consumer  what 
it  costs  to  produce  the  article.  He  collects  from  him  for 
every  possible  expense,  except  the  one  cost  in  human  life. 

It  has  been  argued  time  and  again  and  very  lately  I read 
a decision  of  a distinguished  Court  in  which  the  argument 
was  used — that  in  these  dangerous  occupations  the  hazard 
is  taken  into  account  to  begin  with,  and  provided  for  in 
the  wages.  There  never  was  a worse  economic  fallacy  ut- 
tered. As  a matter  of  fact,  in  some  of  the  most  dangerous 
occupations,  I think  it  would  not  be  too  much  to  say,  if 
you  take  unskilled  employees,  where  the  power  of  organiza- 
tion is  nil,  tliat  tlie  wages  Avill  be  found  to  be  almost  in  in- 
verse ratio  to  the  danger.  ' 

I said  that  Ave  are  beliind  the  civilized  Avorld  in  that 
respect.  And  tlie  still  more  discouraging  fact  is,  that  Ave 
must  probably  ahvays  remain  so.  I think  it  is  not  too  much 
to  say  that  on  account  of  the  dual  nature  of  our  government 
Ave  Avill  probably  for  many  many  years  to  come  be  behind 
in  eA^ery  single  form  of  social  legislation,  if  that  legislation 
in  any  Avay  places  a burden,  or,  an  added  cost,  upon  in- 
dustry. That  is,  in  other  countries,  Avith  a different  form 
of  goA^ernment,  when  action  is  taken  tliat  puts  a burden  up- 
on any  producer,  that  same  action  puts  the  same  burden 
upon  all  producers  within  that  territory.  European  coun- 
tries probablv  have  to  consider  the  fact  of  whether  a neigh- 
boring country  will  readilv  assume  the  same  burden.  Pos- 
sibly Germany  might  ask  itself  the  question  ^^Will  France 
do  this?”  and  France  ask  itself  the  question  ^^Will  Eng- 
land do  this?”  But  with  us,  the  subdivision  becomes  much 
smaller.  When  you  suggest  any  legislation  'of  this  kind, 
the  reply  from  the  manufacturer,  and  an  entirely  proper 
reply,  is  ^hnust  a burden  be  placed  upon  that  line  of  in- 


8 


(Justry  in  this  state  and  in  no  other  state?”  If  the  com- 
petition is  strong  and  the  margin  of  profit  small,  it  be- 
comes a very  serious  thing  to  put  that  burden  upon  any 
industry  in  one  state  and  not  in  another.  And  in  my 
judgment,  in  this  present  discussion  the  only  legitimate 
question  is.  Can  we  bring  about  legislation  of  this  kind 
and  avoid  a system  that  will  place  that  burden  upon  the 
producer  in  one  state  and  leave  him  free  from  it  in  an  ad- 
joining state.  I think  one  of  the  best  steps  that  can  be 
taken  in  the  way  of  uniform  legislation  is  the  one  being 
taken  right  here  this  morning;  and  I have  every  hope  that 
from  the  conference  begun  here,  and  other  conferences,  will 
be  developed  and  ultimately  brought  about  a succession  of 
steps  (I  tliink  probably  short  steps  in  the  beginning)  in 
which  practically  all  the  states  of  the  country  can  unite. 

As  I said  at  the  beginning,  it  does  not  seem  to  me  that 
on  the  actual  question  of  the  desirability  of  compensation 
acts  in  the  United  States,  there  can  be  two  sides.  I assume 
that  all  understand  what  is  meant  by  that;  that  is,  acts 
which  shall  place  upon  the  consumer,  through  the  medium 
of  the  employer,  the  entire  cost  of  accidents  in  industry; 
that  is,  that  the  inevitable  risk  shall  be  placed  upon  the 
employer,  by  him  to  be  transferred  to  the  consumer,  in  every 
line  of  industry  and  for  every  form  of  accident  not  due 
to  the  Avilful  and  you  might  say  almost  gross  carelessness 
of  the  employee.  ' 

In  the  absence  of  Mr.  Smith,  the  subject  will  be  open  for 
general  discussion.  I i 

Mr.  Daivson  : I think  we  would  all  like  to  hear  from  Mr.  • 
Gillette.  • ! ‘ 

ilf  r.  Mercer : Yes,  I was  going  to  suggest  that  Mr.  Gil- 
lette is  the  first  person  who  suggested  a general  conference. 

I would  like  to  hear  from  him. 


9 


The  Chairman : We  should  be  A'ery  glad  indeed  to  have 
3'ou  open  the  discussion  Mr.  Gillette. 

Mr.  Gillette:  Gentlemen,  I have  never  gone  to  a.  confer- 

ence with  an  easier  feeling  that  I did  to  this  one;  because, 
while  I felt  that  possibly  I had  been  instrumental  in  stir- 
ring up  the  subject,  I was  not  on  the  program  and  that  my 
only  office  would  be  to  come  and  listen. 

I do  not  know  that  at  this  stage  of  the  conference  I have 
very  much  to  say.  I have  been  extremely  interested  in  the 
statements  made  hy  your  chairman,  which,  to  my  mind, 
very  succintly  and  very  plainly  state  the  problem  which 
today  confronts  American  society.  I have  during  the  past 
six  or  eight  months  made  quite  a number  of  speeches  in 
regard  to  this  subject;  and  six  months  ago  I thought  I 
could  make  a pretty  good  talk  on  it.  But  day  by  day  I 
begin  to  appreciate  how  little  I really  know  about  the  dif- 
ficulties confronting  one  who  attempts  to  change  the  ex- 
isting conditions. 

I do  not  presume  that  there  Avould  be  any  radical  dif- 
ference of  opinion  among  the  gentlemen  present  represent- 
ing the  various  phases  of  society — the  employes,  employer, 
the  legal  fraternity,  or  society  at  large,  provided  there  was 
some  available  remedy  by  which  it  could  be  so  provided 
that  the  victims  of  industrial  undertakings — those  who 
suffer  in  industrial  accidents — should  be  compensated  by 
their  employers  in  such  a manner  that  the  cost  should  be 
transferred  into  the  cost  of  their  products,  but  the 'diffi- 
culties confronting  any  commission  or  any  body  which  at- 
tempts to  frame  legislation  which  will  bring  about  this 
transformation,  are  to  me  very  appalling. 

I ha\  e been  very  greatly  pleased  at  the  sane  statement 
of  the  purposes  of  this  conference.  In  vulgar  parlance,  I 
am  this  morning  an  agnostic  from  Missouri.  I simply 


10 


don’t  know.  I came' here  to  hear  from  sucli  gentlemen  as 
Commissioner  Neill,  Dr.  Frankel,  Mr.  Dawson,  and  otliers 
who  have  made  a study  of  this  subject  for  years,  to  see 
if  some  plan  could  be  proposed,  or  at  least  if  we  could 
agree  upon  some  basic  principle  of  action,  by  which  tliat 
uniformity  in  state  legislation,  which  to  my  mind  is  abso- 
lutely essential,  can  be  suggested  and  can  be  brought 
about.  , I 

I agree  most  thoroughly  with  the  remarks  made  by  your 
chairman,  that  it  is  the  gravest  industrial  and  social  ques- 
tion that  today  confronts  the  American  people.  As  an  em- 
ployer, I have  been  deemed  by  employers  to  have  been 
somewhat  radical  in  this  matter.  In  Minnesota  I have 
been  accused  of  throwing  a firebrand  onto  tlie  dry  prairie. 
Possibly  I have  been  wrong.  But  to  my  mind  it  is  not  only 
arcomniercial  question,  but  it  is  a moral  question.  And,  if 
I am  not  wrong,  the  people,  not  only  in  Minnesota,  but  tlie 
people  of  the  other  great  Commonweal tlis  of  this  country, 
will  evolve  some  method  of  settling  it  and  settling  it  right. 

While  I am  on  my  feet,  there  are  one  or  two  things  which 
I wish  to  say,  and  they  are  these:  In  the  first  place,  I do 
not  hesitate  to  say,  and  to  put  myself  upon  record  as  say- 
ing, that  I believe  the  thorough  stiidv  and  investigation 
of  this  subject  from  the  standpoint  of  the  employer,  from 
the  standpoint  of  the  employe,  and  from  the  viewpoint  of 
society  as  a whole,  is  most  advisable  and  desirable,  and  that 
I believe  the  ultimate  end  and  aim  is  most  commendable. 
I hope  to  see  and  to  hear,  in  the  proceedings  of  this  con- 
ference, something  that  may  allay  the  misgivings  which  I 
have  had,  which  other  employers  have  had,  which  those 
engaged  in  legitimate  enterprise  have  had — ^that  this  move- 
ment means  something  which  is  not  hostile  to  industry; 
which  is  not  hostile  in  any  way  to  the  legitimate  business 


11 


undertakings  of  the  country;  but  that  its  only  aim  and 
purpose  is  to  bring  about  a betterment  of  American  condi- 
tions, more  in  harmony  with  the  enlightenment  of  the  cen- 
tury. What  the  remedy  will  be,  I do  not  know;  but  I be- 
lieve, being  in  a small  way  a representative  of  employing 
interests,  that  I am  charged  with  a grave  moral  responsi- 
bility. I believe  that  that  same  responsibility  rests  upon 
those  who  represent  the  laboring  interests  in  this  confer- 
ence and  in  this  undertaking.  I do  not  believe  that  any 
measure  .which  may  be  proposed,  or  any  measure  which 
will  be  enacted,  will  be  absolutely  satisfactory  to  any  one. 
I believe  that  it  must  be  approached  in  a sane,  calm,  dis- 
passionate manner,  witli  the  purpose  firmly  fixed  tliat  such 
concessions  will  be  made  as  may  lead  to  the  fairest  conclu- 
sion and  solution  possible. 

I see  in  this  room  a number  of  gentlemen  who  represent 
employers’  lia1)ility  insurance  companies.  I know  that  this 
matter  has  been  viewed  from  their  standpoint  Avitli  con- 
siderable alarm  and  misgiving.  In  fact,  I have  been  asked 
in  i*(‘gard  to  my  attitude  in  regard  to  tliis  matter.  I can- 
not but  feel,  as  far  as  my  investigations  have  gone,  that 
tliere  is  undue  alarm.  I cannot  but  feel  that  any  solution 
whicli  is  ultimately  proposed  will  be  an  insurance  propo- 
sition. What  that  may  lead  to  in  form,  I know  not.  Wheth- 
er it  may  mean  the  transformation  of  existing  methods,  I 
know  not.  I doubt  not,  however,  that  any  legislation  which 
is  proposed  or  enacted  must  necessarily  bring  about  a 
change  in  the  basis.  Whether  it  means  that  as  the  risks 
are  carried  in  Great  Britain  ours  will  in  the  future  be  car- 
ries!, or  whether  it  will  be  necessary  to  adjust  ourselves  to 
something  more  nearly  akin  to  that  of  the  German  Empire, 
'J  know  not.  But  whatever  it  may  be,  I do  not  believe  that 
the  credit  of  American  industries  ^an  be  impaired  by  the 


12 


adoption  of  any  system  Avhich  Avill  be  some  sort  of  an  in- 
snrance  system. 

This  is  not  the  proper  time  to  discuss  the  diflficnlties 
which  confront  us.  I say  ^^us”  because  I am  a member 
of  the  commission  of  one  of  the  states.  This  is  not  the 
time  to  discuss  the  difficulties  that  lie  in  the  way  of  legis- 
lation. I came  here  hoping  to  be  one  of  the  beneficiaries 
of  this  conference,  and  hoping  that  some  of  the  gentlemen 
who  have  given  ver^-  great  study  to  the  subject  would  be 
able  to  solve  for  us  some  of  these  most  difficult  problems. 

One  other  thing  I wish  to  say,  and  that  is  this : That  I 
hope  there  will  be  the  utmost  freedom  of  expression  in  this 
conference.  If  there  are  those  here  who  are  opposed  to 
any  movement  in  this  direction,  I hope  they  will  say  so  and 
give  us  their  reasons.  If  there  are  gentlemen  who  have 
gone  so  far  in  their  investigations  as  to  have  devised  a 
plan,  I hope  that  will  be  presented.  But  I hope  the  whole 
discussion  will  be  frank,  free  and  candid. 

The  Chairman:  Gentlemen,  you  have  heard  Mr.  Gil- 

lette’s statements. ' I think  everyone  of  us  will  say  ^^Amen” 
to  his  request  that  we  have  a perfectly  frank  and  free  dis- 
cussion. I think  that  is  what  we  are  all  here  for.  I en- 
deavored to  strike  a keynote  of  that  kind  by  speaking 
frankly,  and  radically  you  might  say,  at  the  outset,  so  as 
to  bring  out,  possibly,  whatever  counter-proposition  there 
might  be. 

Mr.  Briggs,  will  you  give  us  your  views  on  the  desir- 
ability of  this  form  of  legislation? 

ilfr.  Briggs:  Mr.  Chairman  and  i gentlemen,  I came 

here  by  invitation,  at  the  last  moment,  for  the  purpose  of 
listening  and  of  being  educated.  I would  prefer  not  to  take 
any  part  in  the  discussion  at  this  time.  I would  prefer  to 
listen  to  those  who  have  made  an  exhaustive  studj"  of  this 


, 13 


question,  and  I understand  there  are  several  of  them  pres- 
ent. 

The  Chairman:  There  are  a number  of  representatives 
of  employers  present.  It  seems  to  me  tliat  tlie  question  for 
or  against  desirability  might  well  be  discussed  by  tJiem, 
and  then  we  might  ask  those  who  represent  tlie  insurance 
interests  to  speak.  Are  there  any  employers  present  who 
care  to  discuss  the  matter?  (There  was  no  response). 

Dr.  Frankel,  will' you  give  us  some  of  your  views  on  the 
subject?, 

Ur.  Frankel : Mr.  Chairman,  1 think  I shall  prefer  to 

Avait  and  discuss  the  otlier  phases  of  the  subject. 

The  Chairman:  Mr.  Dawson? 

Mr.  Dawson:  Mr.  Chairman,  I am  on  the  tail  of  the 

program,  and  am  ])erfectly  Avilling  to  wait  until  my  name 
is  reached  in  the  regular  order.  Dut  a few  tilings  occurred 
to  me  during  your  oavu  address,  which  I have  no  objection 
to  stating. 

It  seems  to  me  that  the  question  of  desirability  of  this 
class  of  legislation  may  be  dealt  with  from  two  stand- 
points, one  of  them  being  the  siandpoint  of  the  interests  of 
the  Avorkingmen  themselA^es,  and  their  families;  the  other 
one,  a general  economic  stand])oint,  Avhich  includes  the  em- 
ployers’ position.  In  otlier  Avords,  I am  inclined,  for  the 
moment  at  least,  in  discussing  the  subject,  to  include  em- 
ployers as  a part  of  the  general  population  and  interested 
in  it  as  the  rest  of  us  are. 

The  first  thing  Avhich  impressed  Dr.  Frankel  and  myself 
during  our  last  year's  trip  to  Europe  for  the  Russell  Sage 
Foundation  to  study  this  subject — the  Foundation  having 
been  established,  as  I think  almost  all  of  you  knoAv,  by  a gift 
' of  fl0,000,000  from  Mrs.  Sage,  for  the  general,  broad  pur- 
pose of  improving  the  condition  of  Avorkingmen  in  this 


country, — the  first  tliino-  that  we  were  impressed  with  in 
connection  with  tiiis  matter  was  that  to  a perfectly  mar- 
velous dej^T^e  waste  liad  been  done  away  with.  I am  in- 
clined to  discuss  tlie  desirability  of  this  legislation  from 
that  standpoint.  Our  emploj’ers  in  the  United  States, 
starting  as  tliey  did  witli  tremendous  natural  advantages 
and  protected  in  tlie  home  markets,  at  the  origin  of  tlieir 
work  had  to  pay  but  very  little  attention  to  tlie  dii'ect  ques- 
tion of  whether  there  was  some  waste  in  production.  In 
recent  years  there  has  been  an  increasing  and  extremely 
creditable  tendenc}^  all  through  our  business  affairs,  to 
eliminate  all  unneces^sary  waste.  I recall,  as  one  of  tlie 
first  instances,  that  in  banking — a line  of  business  where 
we  Avould  not  have  thought  there  was  any  waste  at  all, — 
the  bankers  found  that  they  were  performing  a number 
of  services,  like  the  collection  of  checks,  for  nothing.  Then 
for  a while  they  undertook  to  make  a graft  out  of  it,  by  cob 
lecting  a.  great  deal  more  than  it  was  worth.  Finally  they 
established  a line  of  very  small  charges,  but  adequate  for 
that  purpose.  They  also  found  there  was  a large  element 
of  waste  in  connection  with  the  small  balances  in  the^ 
banks,  because  of  the  fact  that  they  permitted  accounts 
to  be  really  overdrawn,  while  not  nominally  so,  the  checks 
not  actually  having  been  collected  at  the  time  the  accounts 
were  drawn  against.  So  they  set  to  work  to  have  an  ac- 
curate account  kept,  to  determine  what  was  going  on  in 
regard  to  that,  and  they  discovered  a large  element  of 
v^aste  theie.  At  the  time  iliej  vrere  engaging  in  all  this 
wastefulness  in  banking,  they  were  throwing  the  whole 
burden  upon  the  borrowers.  The  banks  had  to  be  run,  so 
as  to  make  money,  just  as  all  lines  of  business  have  to  be 
if  they  are  successful.  The  labor  that  they  were  perform- 
ir  g and  the  loss  of  interest  that  they  were  suffering  on  ac- 


15 


count  of  tliese  things,  all  had  to  be  made  good  in  the  rate 
of  interest  charged  their  borrowers ; and  it  was  a burden 
upon  the  business  community.  Today  that  has  been  largely 
eliminated.  The  president  of  any  important  bank  in  the 
United  States  never  dreams  of  failing  to  have  before  him 
every  morning  accurate  data  as  to  how  his  bank  is  being 
conducted  and  whether  any  waste  is  taking  place  or  not. 
He  is  guarding  against  it.  ^ 

Our  manufacturers,  I know,  are  doing  the  same  thing, 
to  a much  greater  degree.  As  one  instance,  things  that 
were  tliroAvn  away  a few  }^ears  ago,  in  the  coal  mines,  and 
in  connection  with  the  oil  industry  and  various  other  in- 
dustries of  the  country  as  pure  waste,  have  been  utilized  as 
far  as  possible  for  by-products;  and  this  has  been  done 
profitably. 

In  connection  with  this  one  matter,  I am  of  the  impres^ 
si  on  that  every  manufacturer  and  large  employer  of  labor 
who  has  studied  the  subject  in  his  own  experience,  feels 
tliat  what  has  taken  place  and  what  is  now  taking  place 
under  our  employers’  liability  laws,  is  an  enormous  waste, 
a waste  which  falls  upon  him  and  other  employers  heav- 
ily. And  it  does  not  produce  any  such  results  in  benefits 
to  the  community,  as  warrants  it. 

In  the  first- place,  there  is  the  occasionally  excessive  ver- 
dict. I have  in  mind  an  employer  in  New  York — a small 
contractor  in  connection  with  large  buildings — who  had  a 
$40,000  verdict  returned  against  him,  which  he  so  far  has 
not  been  able  to  escape  from,  find  very  likely  will  have  to 
pay  or  ‘^go  broke”  in  trjing  to  pay  it,  for  an  injury  to  one 
workingman.  That  is  probably  a record-breaker.  But 
there  have  been  other  large  verdicts.  That  is  waste ; waste 
o>f  a kind  that  is  incalculable.  The  amount  awarded  by 
that  jury  and  sustained  by  the  court  so  far,  in  all  prob 


IG 


ability,  is  enormously  beyond  tlie  financial  value  d(\stroycHl. 

Another  kind  of  waste  is  tiie  ambulance-eliaser,  tlie  law- 
yer wlio  prosecutes  these  cases  on  a contingent  fee;  a 
tldng  wliich  in  our  jirofession  some  years  ago  was  regard- 
ed as  cliamperty  and  was  not  permitted  at  all,  but  wliich 
has  grown  out  of  this  situation:  The  workingmen,  and, 

worse  than  all,  the  Avorkingmen’s  families,  without  a dol- 
lar to  their  names,  have  no  other  means  AvhateA^er  of  re- 
coA^ering  Avhat  may  be  fairly  due  them,  than  to  throAV  them- 
selA^es  into  the  hands  of  such  men.  There  is  an  enormous 
Avaste  there. 

And  then,  Ave  have  this  kind  of  Avaste:  We  have  certain 
courts  in  NeAV  York  City  (and  Xcav  York  City  is  not,  like 
Pittsburgh,  for  instance,  a manufacturing  city  first,  last 
and  all  the  time,  by  any  means) — AA^e  have  courts  in  Yew 
York  City  AAdiich  are  constantly  engaged,  day  after  day, 
hour  after  hour,  in  hearing  accident  cases.  They  liaA^e 
practically  no  other  occupation.  The  judges  are  all  the 
time  at  work  on  those  cases.  I think  some  of  you  Avill  per- 
haps recall  that  on  both  sides  there  have  been  accusations 
of  the  fixing  of  juries  in  connection  Avith  litigation  of  this 
type.  So  we  liaA^e  an  enormous  waste  there,  in  the  main- 
tenance of  those  courts  and  the  keeping  of  a large  number 
of  functionaries  in  connection  Avith  them. 

And,  gentlemen,  that  waste  is  all  in  connection  with  a 
purely  business  matter;  a matter  which,  if  up  between  two 
business  men,  it  would  be  regarded  as  absolutely  disgi’ace- 
ful  to  go  to  law  about  at  all.  They  would  sit  down  and 
trA^  to  determine  what  the  right  of  the  matter  is,  and  then 
make  some  sort  of  a settlement  and  go  about  their  busi- 
ness. 

It  is  not  as  if  this  was  a necessarily  litigious  matter.  Its 


17 


litigious  nature  has  grown  out  of  the  conditions  that  Com- 
missioner Neill  has  referred  to. 

In  recent  years  I think  a great  deal  has  been  done  in 
the  United  States  to  relieve  this  waste.  Institutions  like 
the  big  steel  works  of  the  country,  the  oil  industry,  and 
others,  have  organized  and  systematized  (I  may  say  also 
the  railroads)  to  a very  remarkable  degree  their  method  of 
dealing  with  the  subject;  and  they  have  themselves  ar- 
rived at  a system  of  dealing  with  it  that  is  not  in  accord- 
ance with  the  law  at  all.  Occasionally,  of  course,  there  are 
breakdowns,  and  people  bring  suits  just  the  same — and 
they  have  their  troubles  as  well  as  the  rest.  But  I think 
I am  within  the  facts  in  saying  that  the  settlement  *of  ac- 
cident claims  against  the  average  railroad,  we  will  say,  in 
this  country,  when  those  claims  are  made  by  its  employees, 
is  in  about  nine  cases  out  of  ten  made  according  to  what 
seems  to  the  department  which  adjusts  it  (usually  the  law 
department  of  the  company),  to  be  according  to  the  dic- 
tates of  good  conscience,  reason  and  fairness,  and  not  at 
all  according  to  the  legal  rights  of  the  parties.  I know 
that,  as  long  ago  as  twenty-five  years.  Judge  Goudy,  then 
attorney  for  the  Northwestern  Kail  way  in  Chicago,  ex- 
plained to  me  with  a great  deal  of  care  the  method  by 
which  they  were  dealing  with  their  employees.  It  was 
business-like,  and  hard,  if  you  choose — certainly  there  was 
no  sort  of  pretense  of  running  a charitable  institution; 
but  the  method  of  dealing  was  intended  to  be  and  was  fair 
and  decent.  It  involved  the  continuance  of  the  employee 
in  some  work  that  he  could  do,  if  possible;  a settlement  of 
all  the  expenses  of  medical  care  and  surgical  treatment, 
medicines,  appliances,  and  various  things  of  that  sort,  in 
addition  to  allowances  to  take  care  of  the  workman’s  fam- 
ily during  the  time  that  he  was  disabled. 


.8 


A good  deal  of  waste  has  been  done  away  with  by  the 
large  employer  which  among  smaller  employers  was  not 
possible. 

I think  a great  deal  of  waste,  likewise,  has  been  done 
away  with  by  tlie  introduction  of  employers’  liability"  in- 
surance. I know  the  impression  is  to  the  contrary,  and 
there  is  some  ground  for  the  contrary  impression;  for,  ot 
course,  by  the  introduction  of  employers’  liability  insur- 
ance, there  was  introduced  the  agent’s  solicitation,  costing 
on  an  average  fully  one-quarter  of  the  entire  premium. 
But  it  seems  to  me  that  it  is  demonstrable  that  an  enor- 
mous waste  has  been  stopped  by  the  introduction  of  em- 
ployers’ liability  insurance.  In  the  first  place,  I think  1 
am  within  the  truth  in  saying  that  those  companies  which 
have  made  a practice  of  settling  their  claims  instead  of  liti- 
gating them,  are  today  the  popular  companies  among  em- 
ployers. Now,  that  means  an  enormous  saving.  A com^ 
pany  which  has  adjusters,  charged  with  no  other  business 
but  to  go  promptly  when  a workman  is  injured  and  give 
relief  at  the  time  it  is  needed,  making  a settlement  along 
decent  lines,  avoiding  any  refiection  on  the  employer  by 
keeping  him  constantly  in  the  courts  to  defend  suits,  has 
resulted  in  a considerable  saving. 

But,  notwithstanding  all  this,  the  impression  still  re- 
mains in  my  mind,  that  the  most  serious  indictment  of  our 
whole  system  is  that  it  is  wasteful.  We  spend  our  mone> 
on  lawyers,  we  spend  our^money  on  courts ; but  we  do  not 
spend  our  money,  primarily  and  for  the  most  part,  in  re- 
lieving injuries  that  have  been  occasioned  by  industry. 
That  is  the  actual  situation  in  this  country  today;  and 
that  is  the  one  thing  which,  in  my  judgment,  will  eventual- 
ly bring  about  changes  in  our  law,  in  the  direction  of 
greater  simplicity,  greater  directness,  and  the  application 


19 


of  the  money  to  the  purposes  for  which  it  is  paid,  instead 
of  its  being  wasted  in  this  manner.  It  is  my  judgment  that 
this  will  in  the  end  certainly  recommend  to  the  employing 
classes  of  this  country  great  changes  in  our  system. 

Tliere  is  a system  of-  caring  for  injuries,  sickness,  and 
permanent  invalidity  (which  means  that  the  benefit  is 
paid  so  long  as  the  man  remains  sick)  and  old  age  pen- 
sions, in  connection  with  the  electric  company  that  runs  all 
of  the  electric 'lights  and  trolleys  of  Rhode  Island;  intro- 
duced-by  hard-headed  men  like  Senator  Aldrich  and  Mars- 
den  J.  Perry — men  who  have  not  been  paraded  as  philan- 
thropists or  altruists.  It  has  been  found  after  several 
3'ears’  operation  that  under  the  system  which  tliey  have 
adopted  the  cost  is  less  than  ordinary  employers'  liability 
insurance  would  cost.  And,  as  I have  said  before,  I am 
satisfied  that  it  was  a good  deal  cheaper  than  the  waste 
of  the  old  system  would  have  been,  and  that  in  point  of  fact 
it  was  an  economic  advantage  to  the  company  to  have 
protection  furnished  to  their  employees  in  this  manner. 
This  is  only  one  instance. 

We  found  abroad'  practically  universal  testimony  on  the 
part  of  employers  in  the  different  countries  v.diere 
systems  have  been  thoroughly  established,  to  the  same  ef- 
fect; we  found  practically  not  a particle  of  sentiment  in 
favor  of  a return  to  anything  like  the  old  system ; and  that 
was  from  the  standpoint  of  the  avoidance  of  economic 
waste. 

Commissioner  Xeill  (our  Chairman),  in  speaking  of  the 
theory  (which  is  a very  common  one)  that  the  employer 
pays  for  this  risk  in  the  wages  and  that  he  would  be  called 
upon  to  pay  for  it  a second  time  if  some  arrangement  were 
made  for  compensation  on  account  of  industrial  accidents, 
addressed  himself  merely  to  the  question  as  to  whether  it 


20 


^s’as  true  that  this  was  covered  in  the  wages/  I am  quite 
of  his  opinion,  that  the  evidence  is  to  the  contrary.  I may 
add,  in  addition,  that  it  is  believed  abroad,  by  those  who 
have  studied  the  question,  where  this  sort  of  insurance  has 
been  in  force  for  twent}^-five  years,  and  where  they  have 
studied  it  thoroughly  and  statistically,  that  that  is  not  the 
case.  But  let  us  assume  for  a moment  that  it  is  the  case. 
Now,  if  all  the  employees  of  the  United  States  Steel  Com- 
pany, we  will  say,  are  receiving  in  their  wages  in  the  ag- 
gregate a financial  equivalent  of  all  the  accidents  causing 
the  death  of  men  in  that  employment  and  the  injuring  of 
others,  it  means  that,  in  the  aggregate  wages  paid  by  the 
company,  compensation  at  least  equal  to  the  amount  that 
would  be  paid  under  a proper  workinmen’s  compensation 
proposition  is  already  being  paid  by  the  employer.  And 
it  means  something  else.  If  this  is  true,  I think  you  will 
all  agree  with  me  that  the  following  would  be  a very  proper 
thing  to  do : First,  determine  what  the  wages  ought  to  be 
without  that  extra  compensation;  then  wait  until  the  end 
of  the  year,  calculate  what  the  cost  of  all  industrial  acci- 
dents in  that  enterprise  has  been  during  the  year,  and 
send  each  man  his  proportionate  amount.  I wonder  how 
many  of  you  would  be  willing  to  see  that  done?  I wonder 
how  many  employers  throughout  the  United  States  would 
be  willing  to  see  the  money  Ihat  should  go  to  widows  and 
orphans  on  the  deaths  of  husbands  and  fathers,  divided 
up  in  that  manner,  among  those  who  are  still  living.  If 
that  condition  should  exist,  it  would  be  the  most  monstrous 
waste  in  the  whole  proposition. 

Now,  whether  the  burden  is  falling  upon  the  employers, 
or  whether  it  is  actutally  borne  by  the  workingmen  and 
they  are  not  receiving  any  equivalent  for  i':  in  their  wages, 
I am  not  sure.  I concede  that  that  is  more  or  less  a tech- 


21 


nical  question.  But  if  it  is  true  that  in  the  wages  paid  the 
•workingmen  there  appears  something  that  represents  this 

financial  loss,  it  is  likewise  true  that  the  same  considera- 

0 

tions  that  now  determine  their  wages  will,  when  that  com- 
pensation has  been  properly  provided  for,  result  in  wages 
falling  to  whatever  extent  this  increases  wages.  In  other 
words,  it  cannot  in  the  end  fall  upon  the  employer  the  sec- 
ond time  at  all. 

These  things  have  appealel  to  me  for  a great  many  years 
Our  system  is  genuinely  wasteful.  We  pay  the  money,  in 
one  form  or  anotheT*.  We  constantly  pay  it.  But  we  fail 
to  see  to  it  that  it  goes  to  the  place  where  it  ought  to  go 
and  where  it  would  do  the  most  good.  That  is  the  trutn 
about  it.  If  we  couhl  r^^medy  that  by  the  adoption  of  any 
plan  that  has  been  tried  abroad,  or  by  the  introduction  of 
modifications  which  may  seem  desirable  for  our  country,  I 
think  we  will  have  done  a very  valuable  thing. 

In  connection  with  this,  there  is  one  thing  that  I think 
may  interest  you.  The  German  system  has  certainly  not 
been  wasteful;  it  has  been  very  economically  conducted, 
whatever  may  be  its  merits  or  demerits  otherwise.  It  is 
very  complete  in  the  protection  afforded  workingmen^  and 
very  acceptable  to  the  employers  of  Germany.  It  w*as  adopt- 
ed twenty-five  yeai*s  ago.  It  has  had  a long  and  thorough 
trial.  During  that  tw'enty-five  years  Germany  has  moved 
up  to  the  second  place  in  the  matter  of  the  wmrld's  com- 
merce. Xow,  it  did  not  have  any  protection  against  Great 
Britain  in  the  world's  commerce.  Until  ten  years  ago 
Great  Britain  had  a system  of  employers'  liability  very 
similar  to  w hat  w^e  now’  have  in  the  United  States,  in  gen- 
eral. During  that  time  the  relative  position  of  Germany 
utterly  changed.  German  employers  and  German  w’ork- 
ingmen  alike  ascribe  that  change  very  largely  to  the  sys- 


22 


tematic  uon-wasteful  conditions  which  have  been  intro- 
duced in  a businesslike  manner.  On  tliat  account  it  seems 
to  me  that  it  is  desirable,  and  possible  in  the  next  few  years 
in  the  United  States  to  develop  somethino;  as  much  superior 
to  these  tilings  which  have  been  done  in  other  countries 
as  most  of  our  institutions  are  to  the  institutions  of  those 
countries. 

Mr.  Gillette:  ]\[av  I ask  you  one  oi*  two  questions,  Mr. 
Dawson?  AVe  want  to  get  all  the  information  we  can. 
You  say  from  your  observation  abroad  that  the  compen- 
sation acts  were  pretty  uniformly  acceptable  to  both  em- 
ployers and  employees.  AA^ould  you  differentiate  between 
them?  AAliat  foreign  acts  do  you  consider  are  working  the 
best? 

Mr.  Dawson:  Our  inquiries  were  not  sufficiently  ex- 

tended in  anj  one  country,  to  make  absolutely  certain  re- 
garding that.  r>ut  according  to  our  impressions,  after  in- 
vestigations had  been  made  in  various  countries,  I think  I 
am  safe  in  saying  (Am  I not  right.  Dr.  Frankel?)  that  on 
the  whole  the  impression  seemed  to  be  that  in  Germany  the 
system  was  more  nearly  what  the  people  wanted  than  in 
the  other  countries, — more  satisfactory. 

Dr.  Frankel:  In  Germany,  yes. 

Mr.  Dawson:  In  Great  Britain  they  began  in  1897 

adopting  the  principle  that  workingmen’s  compensation  for 
industrial  accidents  should  not  be  based  on  the  theory  that 
the  employer  had  committed  a wrong,  but  purely  on  the 
theory  that  if  he  was  injured  while  at  work  and  was  not 
personal^  responsible  by  his  wilful  act,  compensation 
should  be  paid  by  the  employer,  in  a moderate  way,  based 
upon  his  vrages,  and  the  cost  thus  be  passed  over  to  the 
consumer.  That  plan  was  introduced  by  Lord  Salisbury; 
by  a conservative  government,  not  even  by  a liberal  govern- 
ment, but  by  a government  representing  the  employers  and 


23 


the  wealthy  classes  of  Great  Britain.  It  has  been  twice 
amended,  in  both  cases  being  extended.  The  first  thing 
that  happened  was  that  the  agricultural  interests  of  the 
country  wanted  it  extended  to  them;  that  the  maritime  in- 
terests of  Great  Britain,  which  are  constantly  in  competi- 
tion with  other  countries,  wanted  it  extended  to  them;  and 

» 

the  opinion  of  the  people  of  Great  Britain  was  that  it 
should  be  extended  to  domestic  servants.  It  has  been  so 
extended;  every  employer  of  a domestic  in  Great  Britain 
buys  a little  insurance  policy  that  he  pays  twenty-five  or 
thirty  cents  premium  for,  by  which  his  domestic  is  im 
sured,  and  if  she  happens  to  blow  herself  up  with  gasoline 
in  ligliting  his  fire  in  the  morning,  he  does  not  as  a matter 
of  mercy  and  charity  send  her  to  a hospital  and  pay  her 
bills,  but,  instead,  the  liability  has  been  covered  by  that 
insurance  and  she  is  taken  care  of  in  a way  that  is  definite- 
ly provided  for  under  the  law. 

The  last  extension  in  Great  Britain  was  to  cover  occupa- 
tional diseases  also.  The  administration  that  is  now  in 
power  in  Great  Britain  is  absolutely  pledged  to  the  intro- 
duction of  a system  of  compulsion  and  contributory  in- 
validity insurance  similar  to  the  German. 

In  France  they  did  not  adopt  anything  along  this  line 
until  quite  a little  later  than  Great  Britain  did;  I think 
only  within  the  last  four  or  five  years.  They  adopted  a 
system  very  much  like  Uiat  of  Great  Britain.  The  new 
administration  there,  as  I saw  by  the  paper  day  before  yes- 
terday, pledges,  as  one  of  its  programs,  the  extension  of 
their  system  to  the  lines  adopted  in  Germany.  In  other 
words,  the  other  two  great  commercial  countries  of  Eu- 
rope do  not  appear  to  be  satisfied  with  their  own  s^^stems, 
but  are  developing  them  along  the  lines  pursued  in  Ger- 


many. 


24 


Mr.  Gillette:  In  a machine  shop,  say,  in  Great  Britain, 
what  is  the  comparison  of  rates  paid  ^ the  employer  undei 
the  English  act  as  compared  with  tho;:.e  paid  in  New  York? 
On  the  same  basis  of  benefits,  how  would  the  rates  com- 
pare? 

Mr.  Datoson : I have  not  made  a close  comparison  of  the 

rates  charged  in  the  United  States  and  in  Great  Britain. 
But  before  they  adopted  their  acts,  our  rates  were  higher, 
quite  materially. 

Mr.  Gillette:  Because  our  risks  were  greater? 

Mr.  Daicson:  Our  risks  were  greater;  we  had  been 

more  wasteful,  a little  more  crude  in  our  methods,  and  we 
Avere  not  so  careful  as  they  were  in  Great  Britain  or  in 
Germany. 

Q.  What  does  it  cost  to  administer  the  fund  in  Ger- 
many? 

Mr.  Daicson:  About  tweh^e  per  cent  of  the  money  col- 
lected for  insurance  premiums  on  employers’  liability  or 
workmen’s  compensation  insurance  in  Germany  is  ab- 
sorbed in  expenses. 

Q.  And  about  how  much  in  this  country? 

Mr.  Daicson:  I think  it  will  aAwage  probably  forty-five 
or  fifty;  maybe  a little  higher. 

Mr.  Parsons:  You  are  throwing  in  the  commission  ac- 

count. 

Mr.  Da  wson : That  is  a part  of  the  expense. 

Mr.  Parsons:  But  in  Germany  there  would  not  be  any. 

Mr.  Daicson:  Speaking  roughly  on  the  subject  of  em- 

ployers’ liability,  the  percentage  for  taking  care  of  the 
claims  runs  the  cost  a great  deal  higher  here  than  it  would 
under  a Avorkmen's  compensation  act. 

Mr.  Gillette : Maybe  we  can  get  at  it  by  an  inverse  pro- 
cess. For  instance,  in  Germany  there  would  be  approxi- 


25 


mately  88  per  cent  of  the  amount  of  money  collected  which 
would  be  paid  out  to  the  actual  beneficiaries;  and  in  this 
country  I understand  the  loss  ratio  in  Massachusetts  and 
New  York  runs  from  33  to  35  per  cent  and  in  Wisconsin 
about  the  same.  In  Minnesota  it  has  been  about  58  X3er 
cent  the  last  five  years. 

The  Chairman:  Do  you  mean  the  cost  of  administering 
the  insurance  actually  taken  by  the  employer? 

Mr.  Gillette:  No,  I am  speaking  about  getting,  inverse- 
ly, at  the  amount  which  actually  goes  to  the  beneficiaries. 

Mr.  Parsons:  Under  what  line  of  policies? 

Mr.  Gillette:  Ordinary  employers’  liability  policies. 

Mr.  Parsons:  That  is  a different  matter  than  ^Ir.  Daw- 
son lias  been  speaking  of.  The  greatest  cost  comes  from 
fighting  claims. 

Mr  Neill:  I think  the  figures  you  Avant  are  in  the  Wis- 
consin reports. 

Mr.  Gillette:  From  your  examination  of  the  conditions 
abroad  and  the  Avorking  of  the  compensation  acts,  have 
you  reached  a conclusion  as  to  Avhether  a compensation  act 
could  be  enacted  here,  granting  practicalh"  equivalent  ben- 
efits to  those  giA^en  oA^er  there,  Avithout  materially  increas- 
ing the  cost  to  the  employer?  I mean,  creating  an  absolute 
liability  so  that  everybody  AAmuld  be  compensated. 

il7r.  Dawson  : My  impression  is  that  the  cost  Avould  not  be 
materially  increased.  I could  not  say  positiA^ely  that  there 
would  be  no  increase.  The  effect  would  be  about  this : The 
waste  which  Ave  liaA^e  been  referring  to  in  the  settlement 
of  claims,  would  very  largely  be  obviated.  The  companies 
would  rarely  have  to  fight  claims.  They  found  in  Great 
Britain  that  Avhat  they  did  have  to  do  was  to  get  the  law 
construed.  A great  deal  of  litigation  was  necessary  during 
the  first  year  or  two  after  it  went  into  effect,  because  there 


2G  ■ 

was  a question »as  to  ‘Svhat  does  this  mean”  and  ‘Svliat  does 
tliat  mean’’  under  tlie  law.  Until  the  courts  had  passed  on 
those  points,  they  had  to  have  litigation.  But  after  that 
was  over,  and  even  while  it  was  in'  progress,  the  amount 
of  litigation  was  enormously  less  than  previously,  and  al- 
so less  expensive.  Yon  understand  this:  the  amount  to 
which  a man  would  he  entitled  if  totally  disabled,  or  his 
estate  if  he  was  killed,  is  absolutely  settled  by  the  wages 
he  was  receiving  at  the  time.  The  fact  of  liability  is  also 
settled  by  tlie  fact  that  lie  was  killed  or  injured  vrhile  at 
work,  unless  there  is  evidence  that  he  wilfully  brought  it 
about  himself.  The- questions  we  litigate  in  the  United 
States  are,  chiefly,  ^ds  the  employer  liable?”  and  that  in- 
volves: ^^Has  he  been  negligent,  or  some  of  his  supervising 
employees,”  and,  if  they  have,  ‘‘Has  the  employee  also  been 
contributorily  negligent?”  or  “Has  the  negligence  been  by 
some  person  ranking  as  a fellow  servant  or  co-emploj^ee, 
not  occupying  the  position  of  controlling  the  other  em- 
ployees on  behalf  of  the  employer?”,  or,  even  if  the  accident 
was  caused  by  the  negligence  of  the  employer  himself, 
“Was  it  a risk  which  the  employee  fairly  assumed  when  he 
took  the  employment?”  Those  are  the  different  questions 
that  we  fight  out  in  the  courts  as  to  each  individual  case, 
if  it  comes  to  trial.  Now,  all  that  is  wiped  out  by  the 
workmen’s  compensation  act.  And  the  amount  of  the 
benefit,  also,  is  determined  definitely,  instead  of,  as  at  x>res- 
ent,  by  a sharp  lawyer  bringing  all  the  evidence  he  can  to 
shovr  the  net  earnings  of  the  man  and  of  what  great  value 
he  Avas,  and  evoking  a great  deal  of  sympathy  on  the  part 
of  the  jury  by  exhibiting  the  widow  and  minor  children, 
aiming  to  get  a large  verdict — which  some  judges  will  set 
a{§ide,  and  others  will  sustain.  Those  are  the  things  we 
fight  in  the  absencg  of  a AAmrkmen’s  compensation  act. 


27 


V Mr.  Gillette  \ Is  there  any  substantial  imiformity  in  the 
scale  of  comjjensation  in  the  foreign  countries? 

Mr.  Dawson:  Yes,  except  as  to  death  losses;  where 

there  is  less  uniformity  than  in  the  disability  claims.  In 
practically,  all  countries  in  Europe  excepting  England  the 
employee  when  totally  disabled  is  entitled  to  from  sixty 
to  sixty-six  and  two-thirds  per  cent  of  his  wages' during 
its  continuance. 

The  Chairman : And  in  case  of  death,  is  not  about  three 
years’  wages  about  the  standard  they  have  adopted? 

il/r.  Dawson:  That  is  only  true  in  Great  Britain,  I 
think.  Tn  most  other  countries,  it  is  a pension  to  the 
widoAV  during  her  widowhood  and  to  the  minor  children 
during  their  minority,  not  exceeding  in  the  aggregate  what 
Avould  have  been  paid  to  the  employee  himself,  if  disabled. 

Mr.  Parsons : Are  these  acts  abroad  compulsory  or  al- 
ternatiA'e?  Can  the  employee  sue  at  what  we  call  common 
law  here?  Can  he  take  his  choice? 

Mr.  Daicson  : In' France  and  England  he  may  take  his 
choice.  But  onh^  a A'ery  small  fraction  of  one  per  cent  haA^e 
sued  under  the  common  laAv. 

Mr.  Parsons:  In  the  experience  of  liability  insurance 

companies  a great  many  years  ago,  they  all  wrote  what  Ave 
call  workmen’s  collectiA^e  insurance — Avhicli  conies  very 
nearly  to  what  you  call  a workingmen's  compensation  act, 
and  at  the  same  time  they  wrote  a current  liability  insur- 
ance on  those  same  risks.  It  was  supposed,  when  they  did 
that,  that  they  could  reduce  rates  on  the  employers’  liabil- 
ity very  largely;  everybody  thought  of  taking  it  for  grant- 
ed. But  Avhen  the  question  was  looked  up  and  the  experi- 
ence Avas  collated,  I think  our  experience  (which  was  very 
sm'all  on  Avorkmen’s  collective)  ran  along  on  the  same  lines 
with  the  rest  of  the  companies,  and  it  Avas  found  that  it  did 


28 


not  work  for  a reduction  on  the  employers’  liability  insur- 
ance at  all.  None  of  us  could  account  for  it. 

Mr.  Daicsoii:  I may  say  in  connection  with  Mr.  Par- 

sons’ remarks,  that  the  experience  in  Great  liritain  since 
the  workmen’s  compensation  act  passed  has  been  that  com- 
paratively few  suits  have  been  brought  under  the  old  laws. 
They  were  not  disturbed  at  all.  In  Great  Britain  a work- 
man could  sue  his  employer  under  the  liability  law  in  tlie 
usual  way,  and,  if  he  failed  in  that  suit,  the  very  judge  avIio 
heard  the  case  gave  him  the  amount  due  him  under  the 
workmen’s  compensation  act — so  he  didn't  stand  to  lose 
anything.  Now  I want  to  tell  you  a reason  why  there 
were  not  very  many  suits.  The  act  provided  for  a definite 
compensation  to  attorneys,  and  only  for  an  increase  of  that 
compensation  when  there  were  appeals  or  other  difficult 
matters  to  look  after,  and  that  increase  was  to  be  awarded 
by  the  court.  Tlie  result  was  that  the  stirring  up  of  that 
sort  of  litigation  stopped. 

Mr.  McEtcen : Would  there  not  be  a further  waste 

eliminated,  in  the  amount  of  mon^y  paid  to  agents  for  so- 
liciting business? 

Mr.  Dawson:  Only  in  case  a compulsory  insurance  law 
w^ere  passed.  It  wmuld  not  be  the  case  at  all  if  you  only 
passed  a workmen’s  compensation  act.  • 

Mr,  McEicen  : Wouldn’t  ^there  be  a saving  as  a result 

of  doing  a greater  amount  of  busiress? 

Mr.  Dawson  : I think  that  commission  w^ould  not  be 

very  much  reduced. 

Mr.  Gillette : I w^ould  like  to  have  any  gentleman  here 
ask  Mr.  Daw^son  any  questions  that  occur  to  him. 

Mr.  Petrasch : I wmuld  like  very  much  to  have  Mr.  Daw^- 
son  explain  to  us  the  systems  prevailing  in  Germany  and 
in  England;  I w'ould  like  to  know%  for  instance,  whether 


29 


these  compensation  acts  in  German}'  and  in  England  apply 
to  all  persons  who  under  our  law  we  would  call  servants; 
that  is,  say  to  all  persons  where  tlie  relation  of  m^ister 
and  servant  exists,  or  only  to  limited  classes;  also,  what 
the  compensation  is,  if  he  can  tell  us,  in  those  two  coun 
tries,  for  disability,  for  maiming,  and  for  fatal  accidents; 
also  whether  they  apply  to  any  accident  incurred  in  the 
employment,  and  whether  or  not  they  must  be  accidents 
incurred  in  the  immediate  doing  of  the  work;  also  whether 
or  not  they  have  been  extended  to  sickness,  for  example, 
occurring  in  the  same  employment,  and  so  on.  I have  found 
it  very  difficult  indeed  to  get  any  information  on  these  sub- 
jects. 

Mr.  Dawson:  I could  not  give  you  all  that  information 
in  the  time  allotted  me  this  morning. 

The  Chairman:  I can  wire  to  Washington,  and  possi-. 

bly  by  tomorrow  morning  have  liere  a copy  of  a.  bulletin 
prepared  by  the  Bureau  of  Labor,  in  which,  in  about  ten 
pages,  about  seven-tenths  of  the  information  you  have 
asked  for  is  given. 

Mr.  GiUette:  I am  particularly  anxious  to  hear  from 

anybody  who  thinks  a movement  of  this  kind  is  not  de- 
sirable. There  may  be  lots  of  things  that  some  of  us  have 
overlooked. 

The  Chairman  : The  conference,  I think  would  all  agree 
with  Mr.  Gillette  that  we  would  like  particularly  to  hear 
from  anjmne  holding  any  view  that  this  is  not  desirable. 
The  discussion  ought  not  to  be  too  one-sided. 

il/r.  Rowe:  Mr.  Parsons  made  a suggestion  which  I 

think  may  give  a wrong  impression,  as  to  the  carrying  of 
workmen's  collective  insurance  and  its  effect  upon  the 
liability  rates.  We  have  found  from  actual  experience  in 
large  individual  risks  (which -I  think  is  perhaps  a better 


30 


criterion)  that  the  carrying  of  workmen’s  collective  insur- 
ance has  reduced  at  least  by  one-third  the  claims  formerly 
arising  where  liability  insurance  alone  was  carried.  1 
think  the  general  tendency  is  to  reduce  from  a quarter  to 
a third  the  number  of  claims.  That  does  not  mean  it  would 
reduce  the  loss  ratio  that  inuclq  but  the  actual  number 
of  claims  are  reduced  at  least  to  that  extent. 

Mr.  P(n'soui<:  It  would  reduce  the  loss  ratio  about  five 

per  cent. 

Mr.  Roioe:  The  general  practice  now,  I believe,  is  to 

discount  the  employers’  liability  rate  somewhere  about 
five  or  ten  per  cent  as  an  estimated  advantage  they  gain. 

Mr.  GiUette:  Mr.  Rowe,  is  it  the  general  experience  of 

liability  companies  that  the  number  of  recoveries  is  in- 
creasing, or  not? 

Mr.  Fowc:  Increasing,  decidedly. 

Mr.  Parsons:  The  law  has  been  liberalized  all  over. 

New  decisions  are  always  in  the  way  of  liberalizing  the 
advantage  to  the  employes. 

Mr.  Mercer:  Is  the  cost  under  our  existing  system  and 
under  existing  conditions  tending  to  increase,  or  is  it  de- 
creasing, or  is  it  remaining  stationary? 

Mr.  Roice:  Increasing,  decidedly,  as  a result  of  the 

tendency  to  gTeater  protection  to  the  employes,  placing 
the  cost  on  the  industry  and  on  the  product. 

Mr.  Mercer : Then  in  your  judgment  it  is  not  a question 
of  letting  things  stand  the  way  they  are  now,  because  they 
are  not  ‘^standing”  anyway? 

Mr.  Roice:  No,  sir,  they  are  not. 

Mr.  McEicen : With  the  tendency  of  the  day,  it  natural- 
ly follows  that  employers’  liability  companies  may  be  ob- 
liged to  increase  their  rates,  does  it  not? 

Mr.  Roice:  They  are  constantly  obliged  to  adjust  their 


31 


rates  to  meet  these  conditions  in  varions  states  and  various 
trades,  by  reason  of  that  constant  change  of  conditions; 
and  it  is  always  along  the  line  of  increase,  unless  there  are 
corresponding  changes  that  can  be  made  as  an  offset. 

Mr.  McEweiv:  Your  rates  in  different  states  are  adjust- 
ed, I suppovse,  not  only  in  the  relation  to  the  peculiar  statu- 
tory provisions  of  those  states,  but  also  to  tlie  prevailing 
sentiment  of  jurors  and  courts. 

Mr.  Roioe:  The  rates  are  based  on  experience,  and  that 
experience  is  an  index  of  results  obtained.*  Sometimes  it 
is  hard  to  explain  why  we  should  have  worse  experience  - 
in  one  locality  than  in  another.  We  can  theorize  on  it  and 
point  at  the  sentiment  towards  employees,  nationality,  and 
all  those  things,  but  we  have  to  base  our  opinion  on  the 
experience  we  have  in  the  different  localities. 

Mr.  Parsons : I think,  Mr.  Rowe,  that  you  are  correct— 
that  the  element  of  waste  that  Mr.  Dawson  speaks  of  is 
getting  less  and  less.  Don’t  you  think  that  all  the  com- 
panies are  coming,  inside  their  offices,  more  quickly  to  a 
decision  as  to  what  a suit  is  worth,  and  paying  it,  and  ad- 
justing, more  than  they  used  to? 

Mr.  Rowe:  I think  the  tendency  of  all  companies  is  to 
settle;  and  that  itself  eliminates  waste. 

Mr.  McEiccn:  The  percentage  of  settling  suits  is  in- 

creasing? 

Mr.  Parsons:  I think  it  is. 

Mr.  Dawson:  Reduction  of  waste  is  taking  place  in 

that  respect.  And  casualty  companies  are  today  settling 
claims — scores  and  hundreds  of  them — where  there  is  no 
legal  liability  at  all,  and  the  employer  is  paying  for  that 
in  his  premiums.  In  other  words,  something  akin  to  what 
we'  think  should  be  established  as  the  regular  practice  oti 
established  principles  of  law,  is  being  established  in  this 


32 


country  by  the  necessities  of  the  business,  and  is  virtually 
being  introduced  to  a very  large  extent. 

Mr.  Parsons : I cannot  agree  with  you  there — as  to  our 
own  company  at  any  rate.  What  made  the  change  with  us 
was  that  they  have  i>assed  new  laws  that  are  comparatively 
easy  to  understand,  and  they  will  convert  whole  classes 
of  cases  that  in  the  old  days  would  have  been  debatable,  in- 
to a liability;  so  it  is  cheaper  to  go  out  and  settle.  That 
results  in  eliminating  waste. 

Mr.  Dawson:  That  is  what  I mean. 

Mr.  Parsons:  I mean  it  is  because  of  a change  in  the 

laws,  but  not  on  account  of  a change  of  heart  on  the  part 
of  the  company. 

Mr.  Daicson:  No — a change  in  the  practice  caused  by 
business  reasons. 

Mr.  Parsons:  No,  caused  by  statutes. 

Mr.  Petrascli : I entirely  agree  with  what  Mr.  DaAVSon 
first  said  in  that  regard.  There  is  no  doubt  that  the  tend- 
ency to  settle  is  very  much  greater  than  it  was  formerly, 
and  it  is  purely  and  simply  a business  proposition.  The 
companies  have  found  that  the  speedier  the  settlement  the 
greater  it  is  to  their  advantage  in  the  long  run. 

Mr.  Parsons : I think  that  has  been  due  to  a change  in 
the  laws. 

Mr.  Petrascli:  They  do  constantly  disregard  questions 

of  liability,  because  undoubtedly  the  great  majority  of  the 
cases  that  the  companies  settle^  even  under  the  laws  exist- 
ing today,  are  cases  that  in  their  opinion  they  could  win 
if  they  fought  them  to  the  finish. 

Mr.  Gillette : In  the  State  of  Minnesota  there  has  been 
no  change  in  our  statutory  provisions  for  twenty  years,  so 
far  as  the  negligence  law  is  concerned.  I think  I am  right, 
Mr.  Mercer? 


33 


Mr,  Mercer:  With  respect  to  railroads  and  some  other 
industries,  there  have  been  quite  a number  of  changes. 
There  have  been  a great  many  laws  passed  in  Minnesota, 
I should  say,  within  twenty  years,  relating  to  this  subject; 
for  instance,  laws  in  the  nature  of  police  regulations — 
requiring  elevators  to  be  fenced,  dangerous  machinery  to 
be  covered,  and  various  other  features  of  that  kind.  But 
there  has  been  no  very  revolutionary  legislation. 

Mr.  Gillette:  I was  possibly  led  into  error  by  having 

read  some  speeches  of  my  friend,  McEwen,  in  which  he  said 
the  laboring  people  of  Minnesota  had  tried  for  twenty  years 
to  secure  some  changes  and  had  not  been  able  to  do  so; 
and  he  charged  a good  deal  of  the  trouble  to  me.  (Laugh^ 
ter)  But  I wish  to  make  the  added  point  that  practically 
few  changes,  if  any,  have  been  made.  The  risk  and  the 
consequent  cost  to  the  insurance  companies  has  constantly 
increased.  I think  the  statistics  of  the  last  five  years  show 
that  their  loss  ratio  in  Minnesota  is  about  fifty-eight  per 
cent  of  the  premium  receipts,  as  against  thirty-five  per  cent 
in  New  York. 

Mr.  Parsons:  AVe  practically  got  out  of  the  state.  We 
do  only  a small  business  there. 

Mr.  Dawson  : Perhaps  it  would  be  well  to  call  attention 
to  an  additional  item  of  waste,  that  appeals  to  me  very 
strongly,  and  which  there  is  no  possibility  of  the  communi- 
ty as  a whole  escaping  from.  I was  born  and  brought  up 
in  Wisconsin,  a state  which  at  the  time  I was  a boy  was 
largely  a lumber  manufacturing  state.  I can  easily  im- 
agine some  of  the  leading  lumbermen  of  our  state  going 
clear  into  the  air  on  a proposition  like  this.  A lumberman 
whom  I have  in  mind,  in  an  occupation  that  was  compara,- 
tively  dangerous,  was  paying  probably  more  money  in  dif- 
ferent ways,  or  quite  as  much  money,  because  of  this  very 


34 


kind  of  waste,  every  year,  as  would  liave  been  retjuired  to 
handle  it  in  a businesslike  way.  I do  not  need  to  say  to 
all  of  you  that  the  lumber  business  was  conducted  very 
wasfefully  in  those  years,  both  from  the  standpoint  of 
the  lumberman,  from  the  standpoint  of  the  Government 
itself,  and  everybody.  And  this  method  of  paying  dam- 
ages to  employees  was  wasteful.  Tliat  lumberman  was 
probably  the  only  man  that  was  paying  a large  amount 
of  taxes,  in  that  community;  and  every  workman  that  he 
did  not  compensate  out  of  his  own  pocket  as  a matter  of 
mercy  or  charity,  or  through  a large  award  paid  as  a mat- 
ter of  law,  had  to  be  taken  care  of  by  that  community,  and 
he  paid  for  most  of  that  in  the  taxes.  He  did  not  get  avray 
from  it  at  all.  It  Avas  the  most  Avasteful  Avay  in  the  Avorld 
for  hini'to  take  care  of  it;  because  it  meant  the  pauperiza- 
tion of  the  family,  the  throwing  of  the  Avife  and  children 
upon  the  town,  and  all  that  sort  of  thing. 

This  is  another  tremendous  element  of  waste  that  we 
have  to  confront  throughout  this  country  today. 

Mr.  Gillette:  From  your  observations  abroad,  did  the 

enactment  of  workmen’s  compensation  laws  accomplish 
any  good  results  in  remoAung  causes  of  friction  between 
the  employer  and  the  employee,  growing  out  of  litigation 
over  personal  injury  claims? 

Mr.  Dawson:  Yes,  so  far  as  litigation  vras  concerned 

it  accomplished  large  results.  I would  not  like  to  say  that 
it  accomplished  any  large  results  so  far  as  strikes  and  that 
sort  of  thing  are  concerned.  Aside  from  the  meeting  of  em- 
ployers and  employees  in  mutual  conference  in  the  sick- 
ness insurance  societies,  as  in  Germany,  I doubt  if  it  had 
much  effect  in  that  direction.  But  of  course  the  friction 
that  grew  out  of  suits  for  damages  was  almost  entirely  re- 
moved. 


35 


Mr.  Parsons : Mr.  Dawson  made  a statement  that  seems 
to  me  accounts  for  the  abatement  of  friction  in  lawsuits, 
and  that  was  that  the  compensation  to  the  lawyer  bring- 
ing  such  suits  was  fixed  by  the  court.  It  seems  to  me  that 
the  element  of  leaving  the  lawyer  open  to  make  his  own 
compensation  utterly  changes  the  basis  of  everything.  Do 
yon  not  think,  Mr.  Dawson,  that  it  is  what  the  lawyer 
makes  out  of  it  that  stirs  these  cases  up?  I am  only  speak- 
ing from  the  point  of  view  of  one  sitting  at  an  insurance 
company’s  desk  and  seeing  what  comes  in  every  day. 

Mr.  Gillette:  But  is  it  not  also  true  that  it  is  a neces- 
sary evil  connected  with  our  present  system? 

Mr.  Mercer:  Is  it  not  the  fault  of  the  system  entirely? 

Mr.  Gillette:  Is  it  not  largely  the  fault  of  the  system? 
I speak  entirely  from  any  employer's  standpoint.  When 
a case  is  taken  into  a lawyer’s  office  he  can't  tell  what  the 
jury  would  do  about  it,  and  how  could  the  lawyer  afford 
to  take  the  case  unless  he  had  a fairly  liberal  contingent 
fee?  I have  had  that  matter  under  careful  consideration;  in 
fact  I have  had  one  or  two  bills  prepared  at  times  to  present 
to  the  Minnesota  legislature,  but  I have  come  to  the  conclu- 
sion that  there  was  a measure  of  doubt  as  to  whether  it 
would  be  fair  to  the  injured  workingman  to  take  away 
from  him  the  right  to  make  a contract  with  his  attorney,  a 
contract  under  which  it  would  be  provided  that  the  attor- 
ney, for  the  risks  which  he  took  in  bringing  the  case,  for 
looking  up  the  evidence  before  the  trial,  for  preparing  the 
case,  trying  it  in  court,  etc.,  in  a gamble,  should  in  the  event 
of  the  successful  issue  of  that  suit  be  reasonably  compen- 
sated. There  are  very  grave  evils  connected  with  the  am- 
bulance-chaser system.  It  has  troubled  me  a great  deal. 
But 'I  have  not  been  able  to  see  why  it  is  not  a necessary 
adjunct  of  the  present  system. 


36 


Mr.  'Neill : There  are  probably  very  few  lawyers  ]jreseiit, 
and  they,  being  naturally  modest,  would  not  care  to  say 
anything  for  themselves  in  this  matter,  so  I might  ijerhaps 
be  permitted  to  say  a good  word  in  defense  of  the  am- 
bulance-chaser. I have  a friend  who  did  a good  deal  of 
that  work  in  the  City  of  New  York.  He  was  a man  who 
had  otherwise  a good  practice.  I know  that  he  did  it  large- 
ly as  a matter  of  sentiment.  I talked  with  him  about  those 
cases,  at  length,  on  one  occasion.  He  showed  me  some  ac- 
counts that  he  had  kept.  And  I doubt  very  much  whether 
the  lawyer  who  takes  that  class  of  business  makes  a very 
large  return  for  the  amount  of  time  and  energy  he  ex- 
pends. There  is,  as  Mr.  Gillette  has  said,  a very  large 
gamble  in  it.  He  showed  me  one  case  in  which  he  got  a 
verdict  for  |6,000.  He  had  taken  it  on  a fifty  per  cent  fee. 
It  cost  him  |3,200  to  fight  the  case  through  to  the  last 
court.  The  existence  of  the  ambulance-chaser  is  simply 
inevitable  under  the  present  system. 

Dr.  Frankel : In  Germany  the  original  jury  of  award  is 

the  employer  in  the  so-called  trade’s  associations;  On  the 
other  hand,  the  employee  has  a right  to  appeal.  Litiga- 
tion is  free.  As  a result  it  has  always  been  objectionable 
to  the  employee  that  he  has  had  no  voice  in  the  original 
decision,  particularly  as  to  the  amount  of  compensation  to 
be  allowed  in  partial  invalidity.  If  I remember  rightly, 
fifty  per  cent  of  those  cases  are  appealed — ^are  they  not,  Mr. 
Dawson? 

Mr.  Dawson : Fifty  per  cent  of  all  the  cases  where  tliere 
is  not  total  disablement;  where  a party  is  disabled  and  they 
are  fixing  the  degree  of  disablement. 

Dr.  Frankel:  It  costs  the  employee  nothing,  and  he 

goes  ahead  and  appeals. 

Mr.  Parsons : Could  you  tell  me  how  many  of  those  ap- 


37 


peals  are  reversed? 

^ Dr.  Frankel : I think  a large  majority  of  them  are  modi- 
fied. 

Mr.  Gillette:  Mr.  Chairman,  might  I make  a suggestion 
before  I leave  this  question  of  desirability?  A thing  that 
has  very  much  influenced  my  views  on  this  subject  is  the 
question  of  our  present  laws  as  relating  to  negligence,  and 
their  effect  upon  the  morals  of  the  community.  I believe 
that  there  is  not  a gentleman  who  has  had  to  do  with  per- 
sonal injury  matters  that  will  not  agree  with  me  when  I 
say  that  under  our  existing  sj’stem  there  is  no  one  thing 
which  is  a subject  of  litigation,  which  so  much  breeds  per- 
jury, as  the  laws  relating  to  negligence.  The  employee 
tries  so  to  color  the  evidence  as  to  bring  him  propertly 
within  the  rules  so  that  he  can  recover.  The  employer  does 
exactly  the  same  thing.  It  seems  to  me,  as  viewed  from  a 
moral  standpoint,  that  if  the  whole  question  of  negligence 
could  be  eliminated  it  would  have  a very  salutary  effect 
upon  the  morals  of  every  community. 

Mr.  Parsons  : I should  like  to  interrupt  and  say  ^Clmen’^ 
to  that. 

Mr.  Blaine : Mr.  Chairman,  I have  come  as  a member  of 
the  Wisconsin  Committee  appointed  by  our  legislature,  to 
investigate  and  prepare  a bill  along  the  lines  of  employ- 
ers’ liability  or  Avorkmen’s  compensation,  so  T have  come 
here  particularly  for  information,  rather  than  to  engage  in 
the  discussion. 

I Avant  you  to  pardon  me  for  intruding  in  this  discus- 
sion, because  of  my  lack  of  knowledge  on  the  subject.  AVhat 
I say  may  lead  to  some  suggestions  or  discussion  by  others, 
from  whom  I can  gain  considerable  benefit,  and  what  I 
say  will  be  said  for  that  purpose. 

I have  some  personal  views  upon  the  subject,  gained 


38 


from  probably  a seconcMiand  irivesti«atioii,  but  the  best  at 
my  disposal.  I started  out  sometime  a^o  to  investigate  the 
subject  of  employers’  liability  aud  workingmen's  compen- 
sation. I think  I have  accnmnlated  a library  upon  that 
subject  which  I will  never  be  able  to  read  during  my  life- 
time. I have  gained  some  very  valuable  information  from 
the  reports  of  the  labor  departments  of  Massachusetts, 
Connecticut,  New  York  and  Wisconsin,  as  well  as  from 
the' departments  at  Washington,  particularly  from  a spec- 
ial report  written  by  John  Graham  Brooks.  I desire,  how- 
ever, at  the  outset,  to  offer  a defense,  or  rather  a rebuttal, 
to  the  charge  made  against  ambulance-chasers.  I am  an 
attorney  myself,  but  I have  never  tried  a personal  injury 
suit  involving  negligence,  in  any  of  the  industrial  lines, 
so  that  it  is  not  a personal  defense  of  myself  but  rather  of 
my  professional  brethren.  It  has  been  my  experience  that 
a majority  of  attorneys  who  take  these  negligence  cases 
are  men  of  high  standing  in  their  profession  and  as  citi- 
zens in  their  respective  communities.  It  is  true  there  are 
a few  who  can  be  rightly  dubbed  ‘^ambulance-chasers”; 
but  ninety-five  per  cent  of  the  attorneys  who  handle  negli- 
gence cases  ( in  Wisconsin,  at  least ; I know  nothing  about 
them  outside  of  Wisconsin)  are  men  of  high  standing  in 
their  profession.  On  the  other  hand,  we  find  that  since 
the  introduction  of  employers’  liability  companies  there 
has  come  what  I would  term  ^^professional  corpse  attend- 
ants.” When  an  accident  occurs  resulting  in  death,  a lia- 
bility company  of  course  is  notified,  and  it  at  once  sends 
one  of  its  expert  agents  to  the  scene,  and,  while  the  widow 
is  under  the  greatest  distress  in  the  world  because  of  the 
loss  of  her  husband  and  the  loss  of  his  employment,  she 
is  subject  to  be  preyed  upon  by  those  agents,  and  an  unfair 
settlement  is  induced  at  that  time  when  it  could  not  have 


39 


been  made  if  she  had  had  time  to  consult  a reputable  at- 
torney. I think  that  class  is  entitled  to  as  much  condeim 
nation  as  the  professional  ambulance-chaser.  I offer  that 
in  rebuttal  of  what  might  be  charged  against  the  lawyers 
who  take  negligence  cases. 

What  I have  to  say  is  not  by  way  of  criticism  but  by 
way  of  suggestion.  Sometimes  I am  somewhat  radical  up- 
on these  points.  I do  not  discuss  them  from  the  stand- 
point of  criticism  of  individuals,  but  ratlier  as  a criticism 
of  a system,  entirely.  I know  that  the  employers,  and  I 
know  that  tlie  liability  companies,  want  to  escape  all  the 
financial  responsibility  that  they  can  in  negligence  cases, 
particularly  in  our  industrial  lines.  It  is  said  that  we  are 
saving  waste,  but  it  is  a waste  saved  to  the  employer  and 
not  to  the  einployee  that  has  been  going  on  in  this  country 
I believe.  I have  had — not  the  pleasure  but  the  opportun- 
ity of  visiting  Madison  Square,  Union  Square,  the  Battery, 
and  the  wharves,  in  New  York  City,  for  two  days — a very 
short  time  in  which  to  make  any  investigations — but  as  I 
saw  the  crippled,  the  legless,  the  armless  men,  I realized 
one  of  the  reasons  for  our  tramps  and  hobos  of  today — 
men  who  had  come  to  their  decrepit  and  unfortunate  con- 
dition through  accidents  happening  to  them  while  occupy- 
ing honorable  positions  as  employees  in  large  industrial 
institutions.  Xow,  to  that  class  of  men  .there  has  been  no 
saving,  and  the  waste  is  still  going  on.  The  waste  contin- 
ues, in  depriving  his  family  of  the  benefit  of  his  employ- 
ment, of  the  little  that  he  made  to  sustain  the  wife  and 
the  children  during  their  minority,  when  they  should  he 
in  school  receiving  education  and  social  betterment.  That 
is  a waste  that  we  are  not  preventing  by  reducing  the  num- 
ber of  lawsuits,  or  through  our  employers’  liability  com- 
panies as  they  exist  today;  because,  where  settlements  are 


40 


made,  they  are  made  at  a very  low  figure,  as  is  shown  by 
the  reports  of  our  Wisooiisin  Commissioner — at  a figure 
far  below  what  would  compensate  a man  in  case  lie  lost  his 
arm,  or  the  fainiW  in  case  the  husband  lost  his  life.  The 
waste  is  saved  entirely  upon  the  side  of  tlie  employer  and 
not  of  the  employee. 

In  Wisconsin  we  are  trying  to  liberalize  tlie  co-employee 
rule  and  also  the  assumption  of  risk  proposition.  And, 
while  we  should  all  consider  this  subject  fraiikly,  there  is 
one  thing  that  I desire  to  suggest  at  this  time,  and  that  is 
the  financial  responsibility  or  liability  of  the  employer  and 
of  the  employers’  insurance  companies  is  going  to  increase 
by  reason  of  the  liberalizing  of  our  laws  on  the  question 
of  negligence.  It  cannot  help  but  increase.  In  Wisconsin 
we  have  passed  a co-employees’  act  relating  ^to  employees 
of  railroad  companies  only,  which  makes  changes  in  the 
fellow-servant  rule  entirely,  and  our  Supreme  Court,  in 
construing  that  law,  has  given  it  a more  liberal  construc- 
tion than  the  railroads  ever  anticipated,  so  that  at  the 
present  time  the  financial  responsibility  of  a railway  com- 
pany in  reference  to  its  employees  where  the  co-emploj^ee 
question  comes  into  the  case,  has  been  greatly  increased. 

I think  that  within  ten  years,  if  we  do  not  succeed  in 
getting  a compensation  act  (or  whatever  name  you  may 
want  to  give  it)  Wisconsin  in  all  the  industrial  lines  will 
do  away  entirely  with  the  present  fellow-servant  rule,  be- 
cause public  sentiment  is  drifting  that  way  very  rapidly, 
and  I think  it  is  only  a question  of  time  when  that  will 
take  place  in  Wisconsin.  Farmers,  merchants,  mechanics, 
and  all  other  people,  are  considering  this  question.  It  is 
not  a new  thing  to  them.  They  are  talking  about  it ; they 
are  becoming  enlightened  upon  it;  and  as  soon  as  public 
sentiment  becomes  sufficiently  informed  upon  it  they  are 


41 


going  to  drive  the  legislatures  to  the  enactment  of  more 
liberal  laws  along  these  lines.  There  is  one  suggestion 
which  it  is  fair  to  make  to  the  employer — that  he  must 
look  ahead  to  more  liberalized  laws  on  the  question  of  the 
assumption  of  risk  and  the  co-employee  or  fellow-servant 
rule.  There  is  no  way  to  determine  at  this  time  just  what 
that  increased  financial  responsibility  Avill  be;  but  if  they 
could  tell  at  this  time,  I think  there  would  be  no  question 
in  their  minds  that  a compensation  act  Avould  be  a great 
saving  of  waste  to  them  and  their  industries. 

I think  that  society  demands  that  Ave  compensate  the  la- 
borer for  any  accident  that  results  to  him  in  the  course  of 
his  employment,  no  matter  through  who.se  fault  the  acci- 
dent happens,  except  his  wilful  or  A^ery  gross  carelessness, 
and  I would  say  exceedingly  gross  carelessness.  'When  the 
suggestion  is  taken  into  consideration,  if  AA^e  could  esti- 
mate the  cost  of  the  increased  liability  or  responsibility  I 
think  we  Avould  be  in  a much  better  position  to  draft  a com- 
pensation act  that  Avould  be  much  more  acceptable  to  em- 
ployers than  we  can  at  the  present  time. 

The  desirability,  I think  is  beyond  dispute.  It  is  a si^e- 
cific  act,  to  which  objections  Avill  be  made.  The  ^hindesir- 
able”  feature  will  come  out  Avhen  a specific  law  is  drawn 
and  proposed  to  legislatures.  In  the  broad  sense  of  the 
word,  I believe  there  is  no  question  of  the  desirability,  at 
this  time,  of  a compensation  or  employees'  liability  act; 
but  Avhen  aa^c  get  down  to  a specific  act  that  presents  the 
problem  directly  to  the  employer  and  employes,  there  is 
where  we  will  have  our  trouble  in  getting  through  a laAV 
!half  way  acceptable  to  either  side. 

I Avish  to  suggest  at  this  conference  that  the  employers 
and  employees  must  face  this  problem  with  the  greatest 
of  rationality,  liberality  and  broad-mindedness,  realizing 


42 


that  neitlier  side  will  <»et  all  it  wants  at  this  time.  Uiit  as 
we  evolute  alon<>'  these  lines  I think  tln^  time  will  C )me 
when  both  sides  will  get  what  is  right,  or  as  nearly  right 
as  human  ingennity  can  devise. 

We  hope  to  get  at  a specific  act  that  will  compensate  the 
laboring  men  in  the  industrial  lines.  I do  not  believe  it  is 
desirable  at  this  time  to  extend  it  so  far  as  some  of  the 
foreign  countries  have,  especially  to  agricultural  lines  and 
the  very  small  industrial  ])lants  where  the  workingman  is 
practically  on  the  same  basis  and  working  in  the  same  shop 
with  his  employer,  where  they  are  all  recognized  as  being 
about  in  the  same  position.  They  are  co-workers  in  ana 
joint  operators  of  the  same  plant. 

Mr.  Gillette:  Why  not  there? 

Mr.  Blaine'.  For  instance,  in  a factory  employing  five 
men,  and  we  will  say,  making  wagons  in  a very  small  town, 
where  the  employer  has  himself,  his  two  sons,  and  two 
hired  men  working  in  the  factory,  it  would  be  hard  to  get 
at  what  compensation  should  be  given  to  the  employees 
and  not  to  the  two  sons  and  the  man  who  was  working  as 
the  employer.  As  I said  they  are  co-workers  and  joint  op- 
erators, and  their  relationship  such  rather  than  master  and 
servant. 

Mr.  Mercer:  Would  that  not  be  as  hard  on  the  com- 

munity as  if  they  were  not  relatives,  and  oughtn't  that  to 
be  averaged  in  some  way  and  on  the  same  basis  as  though 
they  were  not  relatives? 

Mr.  Gillette : Why  not  apply  it  to  the  farmer? 

Mr.  Blaine:  There  are  reasons  why  agricultural  pur- 

suits should  not  be  included  at  this  time.  I think  these 
steps  must  be  taken  gTadually;  first  in  the  large  industrial 
lines,  following  that  up  to  such  an  extent  as  the  system 
would  warrant.  I believe  that  in  time  it  should  be  applied 


43 


to  agricultural  as  well  as  industrial  lines. 

Mr.  Mercer:  I did  not  quite  finish  nij  question.  If  the 
industry  is  a liazardous  one,  ouglit  not  the  fellow  who 
works  in  it  be  as  well  protect(?d  in  a small  company  as  in 
a large  company? 

Mr.  Blaine:  I think  so. 

Mr.  Mercer:  And  can  that  not  be  so  arranged  that  the 
risk  can  h(^  averaged  by  some  form  of  insurance? 

Mr.  Blahie:  As  a.  matter  of  exact  justice,  I tliink  that 
should  be  true.  Just  how  to  work  it  out  is  a very  grave 
problem,  in  those  smaller  lines. 

The  Chairman  : Do  I understand  your  position  is,  simp- 
ly, that  as  a practical  proposition  it  is  not  well  to  try  to 
do  it  all  at  one  bite? 

il/r.  Blaine : Not  all  at  one  bite. 

- The  Chairman  : I^n  other  words,  your  exclusion  of  the 

small  factory  and  shop  would  be  a mere  matter  of  expedi- 
ency? 

Mr.  Blaine:  Yes.  The  same  as  in  Great  Britain;  they 
first  extended  it  to  the  large  industrial  lines,  and  then  to 
other  lines. 

Mr.  Gillette:  Hoav  are  you  going  to  differentiate  con- 

stitutionally between  two  concerns  in  the  same  class  of 
industrial  occupation  simply  on  the  basis  of  the  number  of 
men  employed? 

71/r.  Blaine:  That  is  the  ^^practical”  part,  upon  which 

I Avill  have  something  to  say  when  we  reach  it;  but  I do 
not  desire  to  inject  it  into  the  discussion  of  this  morning. 

Now,  it  is  plain  that  this  kind  of  legislation  is  required; 
that  is  admitted  on  every  hand.  When  a man  goes  into  a 
factory  and  manufactures,  for  instance,  this  chair  on  which 
I have  my  hand,  that  chair  represents  material,  labor,  blood 
and  life;  those  are  the  essential  elements  of  that  chair. 


44 


God  lias  given  the  material,  the  laboring  man  has  given  the 
labor,  and  when  he  lias  an  arm  taken  olt’  in  the  making  of 
that  chair,  he  has  put  his  blood  into  it,  and  the  man  who 
uses  it  should  help  him  defray  the  expense  of  the  loss  of  his 
employme-nt.  If  he  loses  his  life,  then  he  has  put  his  life 
into  that  chair,  and  it  is  a necessary  element  of  the  cost 
of  production.  The  machines  that  manufacture  that  chair, 
wear  out.  The  employer  replaces  them,  lie  does  nut  re- 
place them  at  his  own  expense,  except  in  the  first  instance, 
but  the  consumer,  the  user  of  tlie  things  that  that  machine 
produces,  pays  for  the  replacement  of  that  machine.  So 
with  the  user  of  this  chair  which  labor  produces;  he  sliould 
pay,  of  coui'se,  to  compensate  for  the  loss  of  the  employee's 
arm  or  his  life.  The  consumer  is  cfoing  that  today.  The 
consumer  is  paying  for  all  the  litigation  that  we  have. 
The  consumer  is  paying  every  dollar  that  is  paid  out  to 
liability  companies  and  every  dollar  that  is  paid  put  to 
the  laboring  man  for  an  injury  or  for  the  loss  of  a life,  be- 
cause that  is  added  to  the  cost  of  the  thing  produced.  To- 
day they  are  paying  for  all  that,  but  their  money  is  going 
into  waste.  Co-operatively  all  the  people  using  a particu- 
lar article  are  now  paying  for  the  wastefulness  thaChas 
gone  into  that  article;  while  they  should  pay  it  to  the 
man  who  puts  in  his  life  or  his  arm  in  a more  just  and 
scientific 'way.  Now,  that  is  the  great  argument  in  favor 
of  the  advisability  of  a compensation  act.  'I'he  question 
of  whether  it  shall  be  ^^compensation”  and  who  shall  pay 
for  it,  or  whether  it  shall  be  employers^  liability  insurance 
and  how  that  shall  be  paid,  is  a matter  of  practicability 
and  of  detail. 

Dr.  Frankel : Mr.  Chairman,  I refrained  from  speaking 
on  this  subject  when  you  so  kindly  asked  me  to  before,  for 
the  reason  that  I feel  so  strongly  on  it  that  I was  afraid 


45 


if  I were  to  make  any  remai-ks  I might  become  dramatic. 

Mr.  Gillette:  Let  her  go. 

Dr.  Frankel : The  remarks  that  have  just  been  made  by 
Mr.  Blaine  lead  me  to  speak  on  this  branch  of  the  subject, 
for  the  reason  that  I feel  that  if  we  do  nothing  else  this 
morning  we  ought  to  accentuate  as  strongly  as  we  know 
how  the  predominant  thought  which  he  brought  out.  I be- 
lieve that  this  is  not  a question  that  should  be  viewed  ex- 
clusively from  the  standpoint  of  the  employer.  If  we  are  to 
consider  it  as  human  beings  and  as  men,  I think  we  ought 
to  look  at  it  equally  as  well  from  the  standpoint  of  the 
workman.  That  is  the  side  from  which  I have  had  to  ap- 
proach it.  I have  had  a number  of  yeai*s*  experience  with 
the  poor,  and  I have  formed  definite  conclusions  that  there 
are  two  things  in  the  history  of  mankind  as  represented 
particularly  by  Anglo-Saxon  civilization,  which  have  set 
back  the  development  of  our  Anglo-Saxon  communities; 
one  is  the  conception  in  the  English  poor  law  that  a man 
who  becomes  impoverished  is  responsible  for  his  condition; 
the  second  is  the  interpretation  of  law  of  which  the  Chair- 
man spoke,  with  reference  to  the  fellow-servant  doctrine.  I 
think  these  two  things  have  been  more  antagonistic  to  a 
rational,  sane  and  ethical  development  of  mankind  than 
anything  else  I know  of  in  the  history  of  the  human  race, 
at  least  as  applied  to  conditions  in  Anglo-Saxon  countries. 

The  poor  are  not  responsible  for  their  condition.  If  there 
is  any  theory  that  has  been  exploded  in  the  la.st  ten  or  fif- 
teen years  in  the  treatment  of  those  who  have  become  im- 
poverished, in  the  relation  of  charitable  organizations  to 
their  beneficiaries, — if  there  is  one  fact  that  has  been 
brought  out  prominently,  it  is,  that  the  large  bulk  of  those 
who  become  recipients  of  charitable  aid  are  the  creatures 
of  their  environment,  and  that  they^re  not  so  because  of 


4G 


any  sliortcomin^r^  carelessiK'ss,  oi-  otlier  inferioi-ity  in  tlieni- 
selves.  The  average  man  desires  to  live  a.  resi)eetal)le,  hon- 
est, npriglit  existence,  witli  sufficient  protection  accordcxl 
to  liiin  to  enable  liiin  to  live  comfortably,  to  raise  his  chil- 
dren pro])erly,  and  to  liave  a roof  over  his  head.  Xow,  I do 
not  Avant  to  make  any  exaggerated  statements,  but  it  is 
true  that  we  have  not  recognized  tliis  iirinciple  in  indus- 
try. AYe  have  had  an  industrial  development  in  the  last 
tAventy-fiA’e  years — a very  remarkable  deA’elopment,  a de- 
velopment which  lias  grown  largely  at  the  expense  of  tlm 
individual  most  vitally  concerned  in  it — the  employee.  1 
knoAv'  of  no  more  fitting  Avay  of  expressing  this  tlian  a story 
Avhich  was  told  to  me  a few  days  ago  of  a contractor  avIio 
Avas  visiting  a plant  Avhere  a large  operation  Avas  going  on. 
He  recognized  an  old  man  driving  his  horse;  he  had  been  a 
driver  for  the  concern  for  many  years.  The  contractor 
went  up  to  him  and  said  ^Tat,  hoAV  goes  things?”  Pat  said 
^T4ad.”  The  contractor  said  ^What  is  the  matter?”  Pat 
said,  ^They  laid  me  off  a few  days  ago.”  The  contractor 
said,  ^^AA^ell,  Pat,  we  can’t  help  that;  occasionally  that 
must  be  done.”  Pat  replied  ‘‘Yes,  but  the  horse  got  three 
meals  every  day.”  Xow,  the  horse  Avas  of  value;  it  had  a 
financial  value ; but  the  man  had  not.  The  horse  was  tak- 
en care  of  and  the  man  was  left  to  shift  for  himself.  That 
is  the  principle  which  we  have  established,  particularly  in 
industrial  accidents. 

Xow,  the  point  I wanted  to  make  was  ^his:  The  study 
which  has  been  made,  of  poverty,  brings  out  pertinently  the 
fact  that  nearly  all  of  the  poverty  which  we  find  is  not  the 
poverty  of  shiftlessness.  It  is  not  the  poverty  due  to  in 
temperance,  nor  to  weakness.  AA^hen  they  occur,  they  are 
secondary  causes  and  not  primary  causes.  The  large  bulk 
of  pauperism  is  primarily  due  to  the  bad  environment  of 


47 


the  inclividnal,  and  is  a result  in  part  of  onr  so-called  em- 
ployers’ liability  legislation.  Tiie  father  or  the  motlier 
or  the  brother  is  killed  or  injured  or  becomes  incapacitated 
and  the  family,  which  has  been  self-'sustaining  and  re- 
spectable, has  to  go  to  the  wall  perforce,  because  no  pro- 
vision is  at  present  made  by  our  legislation  for  its  care, 
niaintenance  and  support.  Not  only  accident  lays  the 
wage  earner  low,  but  industrial  disease  incapacitates  him 
as  well.  To-day  in  Germany,  England,  and  other  enlight- 
ened countries,  such  diseases  are  considered  worthy  of  com- 
pensation in  precisely  the  same  way  as  accidents  are.  AVhen 
you  find  bakers  Avorking  in  slio])s  128  liours  a week,  when’ 
you  find  tailors  working  70,  80,  00  hours  a Aveek,  when  you 
you  find  men  Avorking  under  conditions  A\diere  there  is  im- 
proper sanitation,  Avhere  there  is  no  ventilation,  wliere  the 
hours  are  long  and  Avhere  the  strain  is  great,  you  are  pro- 
ducing disease  as  a direct  result  of  the  industry,  for  Avliich 
Ave,  in  our  enligtened  civilization  in  the  United  States,  are 
making  absolutely  no  provision.  And  Ave  haA’e  the  re- 
sultant condition  that  the  family  goes  to  pieces,  falls  by 
the  Avayside,  becomes  dependent  upon  the  public  purse  sim- 
ply because  in  this  horrible  crush  to  get  ahead,  in  this  de- 
sire to  make  profits,  the  individual  laborer,  avIio  gives  his 
brain,  braAvn  and  thought,  and  the  best  that  is  in  him,  suf- 
fers the  loss  and  bears  the  entire  responsibility. 

We  are  not  now  discussing  this  question  from  the  stand- 
point of  practicability.  J think  it  can  be  shoAvn  that  there 
are  other  and  better  Avay§  than  Ave  have  at  the  present 
time,  Avhich  can  be  adopted  in  the  United  States.  For  our 
present  purpose  Ave  ought  to  realize  that  AA-e  are  no  longer 
simply  in  an  industrial  age;  that  Ave  have  to-day  in  the 
United  States  accepted  a social  viewpoint;  that  we  have 
put  up  to  the  employer  a sense  of  responsibility  to  his  ein- 


48 


ployees  which  does  not  end  when  they  become  incapacitated 
by  accident  or  by  occupational  disease.  That  is  the  con- 
ception, and  to  my  mind  the  fundamental  conception,  which 
we  should  have  before  us  in  considering  this  question  of 
compensation.  ' ( 

The  Chairman:  I might  suggest  to  the  conference  two 

points  in  regard  to  the  question  of  waste,  which  I have  had 
in  mind  for  a couple  of  years.  We  have  made  a beginning, 
and  on  a few  occasions  have  collected  data,  to  determine 
just  how  much  waste  there  is  under  the  present  system.  We 
propose  to  take  a great  many  cases  of  accidents  and  find 
out  exactly  >yhat  they  have  cost  the  employer  and  the  com- 
munity. We  want  to  find  out  how  much  was  actually  paid 
on  the  part  of  the  employer  in  the  form  of  damages,  cash, 
and  fees,  and,  as  far  as  we  can,  what  the  carrying  on  of  that 
litigation  cost  the  State.  Then  we  are  going  to  try  to  find 
out  what  percentage  of  that  trickled  down  to  the  actual 
recipient,  and  how  long  it  took  it  to  get  there.  From  what 
I know  of  hundreds  of  cases  myself,  I think  those  results 
are  going  to  be  astonishing.  I think  we  are  going  to  find 
that  the  vu’etched  percentage  that  dwindles  down  to  the 
actual  recipient  is  hardly  worth  considering  at  all.  We 
will  find  dozens  and  dozens  of  cases  where,  after  great  ex- 
pense on  both  sides,  a verdict  is  returned  in  favor  of  the 
plaintiff  and  not  one  cent  reaches  him.  On  the  other  hand, 
we  will  find  what  in  one  sense  are  exorbitant  verdicts.  Of 
course,  in  discussing  a topic  of  this  kind,  we  don’t  want  it 
said  that  any  amount  could  pay  for  the  loss  of  a human  life. 

I should  hate  to  feel  that  any  amount  of  money  paid  to 
my  wife  and  children  would  recompense  them  for  my  loss. 
But,  on  the  other  hand,  we  want  to  get  away  from  the  other 
idea.  I think  most  of  us  would  feel  that  it  would  be  un- 
desirable to  have  that  kind  of  thing  taken  into  account  by 
a Court. 


49 


Mr.  Gillette:  Sentimental  damages? 

The  Chairman:  Yes.  I think  it  would  be  undesirable 

from  every  viewpoint.  There  are  some  things  that  money 
cannot  compensate  for.  And  I think  it  is  an  unmoral  prop- 
osition that  those  who  have  been  bereaved. should  attempt 
to  put  a financial  price  on  the  personal  rather  than  the 
economic  loss.  The  economic  loss  is  the  only  loss  that 
should  be  assessed  upon  the  employer  or  consumer.  In 
the  other  case  it  is  not  only  wasted,  Mr.  Dawson,  but  it  is 
horribly  and  most  villianously  distributed. 

Mr.  Dawson : That  is  the  worst  waste  of  all. 

The  Chairman : Yes,  that  is  the  worst  waste  of  all.  We 

expect  to  conduct  this  investigation  very  shortly  on  a large 
scale  and  shall  try  to  make  a showing  in  the  near  future  so 
that  we  may  know  exactly  what  it  is  costing  and  what  the 
real  amount  of  waste  is.  . i ' 

Now,  that  brings  up  the  suggestion  whether  the  state  it- 
self, in  view  of  the  great  saving  in  the  waste  of  litigation, 

might  not  contribute  something  to  that  sort  of  a fund.  A 

0 

judge  if  the  Supreme  Court  of  one  of  the  western  states 
told  me  recently  that  over  half  of  the  time  of*  some  of  the 
state  courts  is  taken  up  with  these  personal  damage  suits. 

Mr.  Parsons:  In  New  York  City  it  is  about  four-fifths, 

in  the  lower  courts,  isn’t  it?  ■ 

A Voice:  But  part  of  those  personal  injury  cases  are 

not  between  employer  and  employee. 

Mr.  Gillette : About  a third,  in  Minnesota.  - 

The  Chairman:  There  is  another  form  of  waste  that 

grows  out  of  this  question,  and  as  a result  of  this  confer- 
ence we  might  be  able  to  assist  in  eliminating  it.  There 
are  quite  a number  of  state  commissions  and  bureaus  of 
labor,  as  well  as  private  organizations,  investigating  this 
subject,  and  there  will  probably  be  a great  deal  of  duplica- 


' 50 


tion  of  effort  and  expense,  unless  some  plan  is  devised  that 
will  prevent  it. 

Mr.  Gillette:  That  is  one  reason  why  this  conference 

was  called — to  try  to  eliminate  that  expense. 

The  Chairman : So  far  as  I am  personally  concerned  I 

would  be  only  too  glad,  if  you  could  decide  upon  the  infor- 
mation that  is  most  desired,  to  have  the  federal  bureau 
gather  for  all  the  bureaus  and  commissions  that  are  study- 
ing the  question.  I do  not  know  of  any  work  that  we 
could  do  that  would  be  more  valuable  along  this  line. 

Mr.  Gillette : May  I make  a motion  at  this  time? — that 

a committee  of  three  be  appointed  by  the  chair  to  draft  a 
plan  of  permanent  organization  and  of  work. 

Mr.  Dawson:  I second  the  motion. 

Mr.  Mercer:  I would  like  to  ask  if  it  is  not  the  object 

to  let  the  chairman  be  one  of  that  committee.  He  might 
not  appoint  himself. 

Mr.  Gillette : That  is  a very  happy  suggestion,  which  is 

most  readily  accepted. 

The  Chairman : Mhy  I suggest,  Mr.  Gillette,  that  it  be 

three  and  that  the  chairman  may  then  be,  ex-off  icio ^ a mem- 
ber? : 

Mr.  Gillette:  Yes. 

Mr.  Stone : I would  like  to  know  whether  the  casualty 

companies  are  entitled  to  vote  on  this  question,  or  whether 
we  are  here  merely  as  spectators.  I was  invited  to  be  here. 

The  Chairman:  I believe  this  is  an  open  meeting.  We 

have  not  appointed  a committee  on  credentials.  Anyone 
interested  in  the  topic,  no  matter  what  the  nature  of  his  in- 
terest is,  we  would  be  very  willing  and  glad  to  have  as  a 
member  of  this  conference. 

The  motion  was  voted  upon, and  carried. 

The  Chairman : Such  committee  will  be.  appointed  im- 


51 


mediately  after  adjournment  and  the  members  will  be  no- 
tified at  once.  If  this  conference  can  reach  some  agree- 
ment and  as  a body  request  it,  I shall  be  only  too  glad  to 
direct  our  work  in  such  a way  that  we  can  furnish  you  at 
the  earliest  practical  moment  definite  information  on  this 
subject.  ; * ' 

Mr.  Gillette : I have  particularly  in  mind  the  fact  that 

the  Wisconsin  Commission,  and  I believe  the  New  York 
Commission,  will  be  obliged  to  report  before  the  Minnesota 
Commission  will.  I realize  the  very  great  effect  that  ac- 
tion taken  by  any  one  state  would  have.  I believe  our  ac- 
tion ought  to  be  uniform  as  far  as  possible.  If  these  com- 
missions themselves  cannot  agree  upon  a plan  of  action, 
it  is  pretty  nearly  useless  to  try  to  get  the  people  of  a state 
to  agree.  ' 

Upon  motion  an  adjournment  was  taken  until  three  P.  M.' 
July  29,  1909. 

The  conference  met  pursuant  to  adjournment. 

The  Chairman ; The  hour  of  three  o’clock  having  arriv- 
ed, the  meeting  will  please  come  to  order. 

Mr.  Gillette:  Mr.  Chairman,  I move  that  the  commit- 

tee which  was  authorized  this  morning  be  increased  from  • 
three  to  five. 

Mr.  Mercer:  I second  the  motion. 

Mr.  Meager:  Mr.  Chairman,  may  I ask  what  committee 

that  is?  I was  unfortunate  enough  to  not  be  here. this 
morning. 

Mr.  Gillette : For  the  benefit  of  those  who  were  not  here 

this  morning  I might  say  that  the  motion  made  this  morn- 
ing provided  that  a committee  of  three  be  appointed  (now 
to  consist  of  five)  to  report  back  on  permanent  organiza- 
tion and  to  map  out  a course  of  action  with  the  idea  of  sys- 

U.  Of  ilL  LIB. 


tematizing  the  work  so  that  different  commissions  might 
not  be  obliged  to  duijlicate  it  and  cover  the  same  ground, 
and  for  the  further  reason  that  there  might  be  uniformity. 

The  motion  was  voted  upon  and  carried. 

The  Chairman : The  Chair  will  appoint  on  that  commit- 

tee Mr.  Mercer  of  the  Minnesota  State  Commission,  Mr. 
Sanborn  of  the  Wisconsin  State  Commission,  Mr.  Seager  of 
the  New  York  State  Commission,  Mr.  Dawson,  and  Mr. 
John  Mitchell. 

Mr.  Mercer  has  received  a letter  from  Mr.  Sanborn  say- 
ing that  he  is  unavoidably  detained  at  Erie  and'  will  not 
reach  here  until  Friday,  and  that  he  has  requested  Mr. 
Blaine  to  take  his  place  on  the  program. 

Dr.  Franlcel:  .1  move  that  the  meeting  this  afternoon 
adjourn  promptly  at  five  o'clock. 

The  Chairman:  Without  objection,  it  will  be  under- 

stood that  if  the  meeting  should  continue  until  five  o’clock 
it  will  stand  adjourned  until  ten  o’clock  tomorrow  morn- 
ing, and  that  if  an  adjournment  is  taken  before  five  it  will 
be  until  tomorrow  morning  at  ten  o’clock. 

The  discussion  this  afternoon  was  to  be  on  the  possibil- 
ity of  workmen’s  compensation  acts  in  the  different  states. 
The  question  was  to  be  discussed  by  Mr.  Sherman  of  New 
York,  and  Mr.  Sanborn  of  Wisconsin,  neither  of  whom  are 
present  at  this  time,  I believe,  nor  Mr.  Blaine  to  speak  for 
Mr.  Sanborn. 

Shall  we  take  up  the  question  of  practicability,  or  shall 
we  have  an  open  discussion  on  possibility? 

Mr.  Gillette:  I think  ^e  ought  to  keep  the  discussion 

in  its  regular  order,  or  we  won’t  know  where  we  are. 

The  Chairman  : I quite  agree  with  Mr.  Gillette.  It 

might  be  better  to  take  up  this  afternoon  the  question  of 
the  possibility. 


53 


Mr.  Gillette:  It  might  not  be  out  of  order  to  say  that  I 

promised  Mr.  Mercer  that  I would  call  upon  him  to'  say 
something  upon  this. 

The  Chairman:  We  would  be  glad  to  hear  from  Mr. 

Mercer  if  he  will  discuss  the  question  of  possibility  for  us. 

Mr.  Mercer : , I didn’t  know,  when  I made  the  plea  to  Mr. 
Gillette,  that  I would  get  the  opportunity  so  soon.  (Laugh- 
ter). I think  if  you  don’t  know  him  now  you  will  before 
we  get  through. 

I am  not  going  to  burden  you  with  the  reading  of  any 
paper;  it  is  entirely  too  long.  I should  like  to  discuss  this 
feature  from  my  own  views,  and  anything  I say  upon  the 
question  will  have  to  be  subject  to  justification  by  further 
study  or  to  modification  as  further  study  may  develop. 

’ t 


54 


\ 


LEGAL  POSSIBILITY  OF  WORKMEN’S  COMPENSA- 
TION ACTS. 

By  II.  V.  Mercer,  of  Minneapolis. 


[The  argument  made  at  the  conference  was  not  as  lengthy 
as  this,  but  an  ou.tline  of  it;  and  these  authorities  since 
provided  for  the  record.] 

Would  a law  changing  the  basis  of  recovery  by  an  em- 
ploye from  that  of  negligence  or  fault  of  the  employer  to 
that  of  a risk  of  the  industry  be  constitutional? 

Can  we  enact  workmen’s  compensation  acts  in  the  Unit- 
ed States  that  will  be  constitutional?  In  our  opinion,  this 
question  must  be  answered  in  the  affirmative  if  Courts 
give  to  it  tlie  same  breadth  of  vision  as  to  other  questions 
of  equal  public  importance,  but  the  source  of  its  justifica- 
tion with  the  states  except  as  to  public  works  must  be  the 
police  power. 

DUAL  GOVERNMENT. 

To  answer  this  question,  we  must  consider  that  our  gov- 
ernment is  built  upon  a dual  system,  having  a federal  con- 
stitution of  granted  powers,  including  limitations,  and 
state  constitutions  of  limitations  upon  powers. 

In  the  Federal  Constitution  the  amendments  provide: 
Article  IX. 

^‘The  enumeration  in  the  constitution,  of  certain 
rights,  shall  not  be  construed  to  deny  or  disparage  oth- 
ers retained  by  the  people. 


55 


Article  X. 

^‘The  powers  not  delegated  to  the  United  States  by 
the  constitution,  nor  prohibited  by  it  to  the  states,  are 
reserved  to  the  states,  respectively,  or  to  the  people.” 

In  McCulloch  v.  The  State  of  Maryland^  et  aly  4 Wheat- 
on, 406  (L.  Ed.  596)  the  Supreme  Court  speaking  through 
Chief  Justice  Marshall  said: 

‘‘All  powers  are  given  to  the  national  government, 
as  the  people  will.  The  reservation  in  the  10th  amend- 
ment to  the  constitution,  of  ‘powers  not  delegated  to 
the  United  States,’  is  not  confined  to  powers  not  ex- 
pressly delegated.  Such  an  amendment  was  indeed 
proposed;  but  it  was  perceived  that  it  would  strip  the 
government  of  some  of  its  most  essential  powers,  and 
it  was  rejected.  Unless  a specific  means  be  expressly 
prohibited  to  the  general  government,  it  has  it  with- 
in the  sphere  of  its  specified  powers.” 

In  Lane  Co.  v.  Oregon,  7 Wallace,  76  L.  Ed.  101,  Mr. 
Chief  Justice  Chase  said: 

“That  people  of  the  United  States  constitute  one  na- 
tion, under  one  government,  and  this  government, 
within  the  scope  of  the  powers  with  which  it  is  in- 
vested, is  supreme.  On  the  other  hand,  the  people  of 
each  State  compose  a State,  having  its  own  govern- 
ernment,  and  endowed  with  all  the  functions  essential 
to  separate  and  independent  existence.  The  States  dis- 
united might  continue  to  exist.  Without  the  States 
in  union  there  could  be  no  such  political  body  as  the 
United  States.  * * * The  general  condition  was 

well  expressed  by  Mr.  Madison  in  the  Federalist,  thus : 
‘The  Federal  and  State  Governments  are,  in  fact,  but 
different  agents  and  trustees  of  the  people,  constitut- 
ed with  different  powers  and  designated  for  different 
purposes.’  ” i 

In  Buffington  v.  Bay,  11  Wallace,  113  (L.  Ed.  122),  it  is 

said:  ' , 1 ^ 1 * ■ ' 

“It  is  a familiar  rule  of  construction  of  the  Consti- 
tution of  the  Union,  that  the  sovereign  powers  vested 


56 


in  the  state  governments  bv  their  respective  constitu- 
tions, remained  unaltered  and  unimpaired  except  so 
far  as  they  were  granted  to  the  Government  of  the 
United  States.  That  the  intention  of  the  framers  of 
the  Constitution  in  this  respect  might  not  be  misun- 
derstood, this  rule  of  interpretation  is  expressly  de- 
clared in  the  10th  article  of  the  amendments.  * * * 

^•The  General  Government,  and  the  States,  although 
both  exist  within  the  same  territorial  limits,  are  sepa- 
rate and  distinct  sovereignties,  acting  separately  and 
independently  of  each  other,  within  their  respective 
spheres.  The  former,  in  its  appropriate  sphere,  is  su- 
preme, but  the  States  within  the  limits  of  their  powers 
not  granted,  or,  in  the  language  of  the  10th  Amend- 
ment ‘reserved,’  are  as  independent  of  the  General 
Government  as  that  government  within  its  sphere  is 
independent  of  the  States.’’ 

In  United  States  ex  rel.  Turner  v.  WilliamSy  191  U.  S. 
296  '(L.  Ed.  979-986),  Mr.  Justice  Brewer  gives  a separate 
concurring  opinion  in  which,  referring  to  the  10th  Amend- 
ment, we  find  this  language : 

“The  powers  the  people  have  given  'to  the  general 
government  are  named  in  the  Constitution,  and  all 
not  there  named,  either  expressly  or  by  implication, 
are  reserved  to  the  people,  and  can  be  exercised  only 
by  them,  or  upon  further  grant  from  them.” 

In  Tioming  vr  Xew  Jersey,  211  U.  S.  78,  it  is  said: 

“It  must  not  be  forgotten  that  in  a free  represen- 
tative government  nothing  is  more  fundamental  than 
the  right  of  the  people  through  their  appointed  ser- 
vants to  govern  themselves  in  accordance  with  their 
own  will,  except  so  far  as  they  have  restrained  them- 
selves by  constitutional  limits  specifically  established ; 
and  that  in  our  peculiar  dual  form  of  government 
nothing  is  more  fundamental  than  the  full  power  of 
the  state  to  order  its  own  affairs  and  govern  its  own 
people,  except  so  far  as  the  Federal  constitution  ex- 
pressly or  by  fair  implication  has  withdrawn  that  pow- 
er.- The  power  of  the  people  of  the  states  to  make  and 
alter  their  laws  at  pleasure,  is  the  greatest  security  for 
' liberty  and  justice.” 


57 


Under  "this  dual  form  of  govern  men  t we  study  the  Fed- 
eral Constitution  to  see  if  the  power  to  legislate  on  this 
subject  has  been  given  to  the  United  States  government; 
we  also  study  both  that  constitution  and  the  constitution 
of  the  particular  state  to  see  if  sncli  legislation  has  been 
prohibited  to  the  state.  This  of  course,  upon  the  theory 
that  the  Federal  Government  is  built  upon  granted  pow- 
ers, but  the  state  government  upon  inlierent,  though  limit- 
ed powers. 


QUESTIONS. 

Under  these  circumstances  we  must  keep  in  mind  three 
things;  First,  Has  the  power  of  legislation  upon  this  ques- 
tion been  delegated  to  Congress  by  the  Federal  Constitu- 
tion? Second,  Has  the  power  of  such  state  legislation  been 
proliibited  by  the  Federal  constitution?  Third,  Has  it  been 
prohibited  by  the  particular  states'? 

THEORY  OF  THE  DISCUSSION. 

I. 

• The  public  work  is  not  controlled  by  the  constitutional 
rule  as  to  freedom  of  contract. 

II. 

The  relations  of  the  people  to  the  governments  of  the 
United  States  and  of  the  several  states  are  based  upon 
contract  to  which  individual  rights  are  enough  subjected 
to  protect  the  general  welfare,  at  least  under  the  police 
power. 


58 


III. 

Tlie  commerce  clause  of  the  Federal  Constitution  grants 
to  Congress  the  right  to  control  relations  of  master  and 
servant  in  so  far  as  needed  in  isuch  commerce,  hut  does  not 
grant  to  the  Federal  Government  the  right  to  deprive  the 
state  of  its  police  power  or  to  regulate  state  commerce. 

(a)  The  commerce  clause  was  not  intended  to,  and  does 
not,  take  aAvay  the  police  power  of  the  states' 

(b)  The  states  execute  the  police  power  even  with  re- 
spect to  interstate  icommerce  but  do  so  for  their  self  pro- 
tection and  only  to  such  extent  as  not  to  amount  to  regu- 
lation in  the  constitutional  sense;  except  Avhere  limited 
they  have  the  poAvers  of  otlier  nations. 

IV. 

The  police  pOAver  of  the  people  of  the  seA^eral  states  was 
neA^er  delegated  by  the  Federal  Constitution,  nor  prohib- 
ited by  that  instrument  from  reasonable  state  exercise. 

(a)  The  Fourteenth  Amendment  was  not  designed  to 
destroy  the  state’s  police  power. 

V. 

Some  of  the  usual  constitutional  objections  against  laws 
are  not  applicable  to  this  question  for  they  do  not  apply 
to  the  state  if  it  stays  Avithin  reasonable,  equal,  and  lawful 
regulations  of  dangerous  employments. 

(a)  The  first  ten  amendments  to  the  Federal  Constitu- 
tion apply  only  to  the  Federal  GoA^ernment  and  do  not  re- 
quire the  states  to  giA^e  the  jury  trial  but  probably  would 
require  such  trial  in  the  Federal  Courts. 


59 


VI. 

The  Fourteenth  Amendment  to  the  Federal  Constitu- 
tion is  a prohibition  upon  the  states — not  upon  the  nation- 
al government. 

(a)  The  privileges  and  immunities  secured  hj  that  in- 
strumtmt  are  those  which  belong  to  citizens  of  the  United 
States  as  distinguished  from  states. 

(-b)  E(pial  protection  of  tlie  laws  is  construed  by  the 
Federal  Courts  as  it  is  by  the  state  courts  to  permit  the 
reasonable  classifications  treating  those  within  the  class 
equally.  This  is  no  bar  to  such  law. 

(c)  The  due  process  of  law  provided  by  the  Fifth 
Amendment  applies  only  to  the  Federal  Government  but 
in  the  Fourteenth  Amendment  it  is  a prohibition  upon  the 
states. 

(d)  The  Federal  Constitution,  however,  does  not  control 
mere  form  of  procedure  in  or  regulate  the  practice  of  state 
courts.  All  that  it  requires  is  that  at  some  point  in  the 
controversy  there  must  be  a time  and  place  for  the  court 
to  adjudicate  the  legal  liability. 

(e)  It  is  not  taking  private  property  without  due  pro- 
cess of  law  within  the  constitutional  provisions  to  require 
dangerous  employments  to  be  liable  for  the  risks  of  the  in- 
jury without  any  particular  fault  in  the  special  transac- 
tions. 

(f)  The  jury  trial  provided  by  the  state  constitutions  is 
the  trial  of  such  cases  as  embrace  principles  secured  by 
the  constitution  when  it  was  adopted  and  not  a trial  of 
matters  involved  only  in  new  laws  isiich  as  this  would  be. 


60 


VII. 

This  sort  of  law  would  not  take  private  property  for 
public  use  by  reason  of  two  principles : 

(a)  Under  our  social  compact  the  private  owner  has 
. no  ownership  except  that  which  is  subject  to  reasonable 

control  such  as  this  would  be. 

(b)  The  private  individual  has  no  right  to  complain  of 
the  taking  of  only  so  mucli  property  as  is  an  aid  to  gov- 
ernment operation  by  reason  of  the  last  above  principle. 

VIII. 

The  Fourteenth  Amendment  secures  the  liberty  of  con- 
tract betvreen  employer  and  employe  except  when  limited 
by  the  police  power;  the  exercise  of  the  police  power  rests 
in  the  legislative  department;  the  courts  interfere  to  up- 
•hold  the  constitution  only  to  prevent  arbitrary  power  from 
being  exercised  under  cover  of  the  police  power. 

(a)  The  courts  recognize  that  the  employer  and'  the  em- 
ploye do  not  stand  on  an  equality  in  making  their  con- 
tracts. 

(b)  The  police  power  is  used  to  regulate  insurance  of 
private  property  and  the  control  of  employer  and  em- 
ploye. 

(c)  No  owner  of  property  has  the  right  to  claim  that  a 
contract  previously  in  existence  has  heen  changed  in  its 
obligations  by  reason  of  the  exercise  of  the  police  power 
because  the  implication  of  the  power  always  went  with 
that  contract  as  a matter  of  law. 

(d)  The  police  power  can  neither  be  legislated  nor  con- 
tracted away. 


G1 


IX. 

The  action  of  the  state  iiinst  not  be  arbitrary. 

(a)  The  coinnion  law  was  not  made  to  meet  the  present 
conditions  and  is  totally  inade(]nate  to  meet  the  present 
conditions. 

(b)  The  law  has  not  kept  apace  with  industry. 

(c)  The  employe  carries  this  risk  now. 

(d)  It  is  a ^reat  temptation  to  perjury. 

(e)  The  employer  not  satisfied. 

(f)  It  is  unsatisfactory  to  the  public. 

X. 

The  com  pen  sat  ion  in  the  modern  foreign  countries  along 
this  line. 

(a)  What  advantage  has  been  made. 

(b)  The  common  law  has  been  modified  in  many  re- 
spects and  there  seems  to  be  no  reason  why  it  should  not 
be  arranged,  at  least  after  a reasonable  remedy  is  given  in 

its  stead. 

/ 

(c)  The  Federal  Grovernment  and  many  of  the  states 
have  been  working  on  this  change  sufficient  to  show  that 
no  party  wants  arbitrary  action  but  only  reasonable  regu- 
lation, yet,  there  are  doubts  in  the  minds  of  many  as  to 
whether  we  can  make  the  necessary  laws. 

XI. 

The  simplest  remedy,  already  well  justified  for  property 
insurance,  is  to  fix  a definite  liability  by  law  for  hazard- 


62 


ous  industries  on  condition  that  'the  amount  of  damages 
be  submitted  to  arbitration — ^repeal  the  common  law. 


XII. 

The  fallacy  in  the  most  of  our  objections  lies  in  the  fact 
that  we  fail  to  understand  or  appreciate  the  weight  which 
must  be  given  to  tlie  power  to  protect  the  public  interests. 
The  power  of  general  Avelfare  must  always  remain  with 
the  states  subject  only  to  reasonable  and  laAvfnl  regula- 
tions. 


I. 

PUBLIC  WORK  fS  NOT  CONTROLLED  BY  THE 
CONSTITUTIONAL  RULE  AS  TO  FREEDOM  OF  CON- 
TRACT. 

In  Atkin  v.  State  of  Kansas^  191  U.  S.  205  (L.  Ed.  148), 
the  Supreme  Court  held  that  the  freedom  of  contract  guar- 
anteed by  the  14th  x\mendnient  Avas  not  infringed  by  the 
provisions  of  the  Kansas  statute,  making  it  a criminal 
offense  for  a contractor  for  public  work  to  permit  or  re- 
quire an  employe  to  perform  labor  upon  that  work  in  ex- 
cess of  eight  hours  per  day. 

That  opinion  Avas  by  Mr.  Justice  Harlan.  It  Avas  stipu- 
lated that  the  labor  performed  Avas  healthful,  outdoor 
work,  not  dangerous,  hazardous  or  in  any  Avay  injurious  in 
the  case  under  consideration.  In  the  course  of  that  opin- 
ion the  court  said : 

^Tt  maj"  be  that  the  state,  in  enacting  the  statute, 
intended  to  give  its  sanction  to  the  AueAV  held  by  many, 
that,  all  things  considered,  the  general  welfare  of  em- 
ployees, mechanics  and  Avorkmen,  upon  Avhom  rest  a 
portion  of  the  burdens  of  gOA^ernnient,  Avill  be  sub- 


63 


served  if  labor  i^erformed  for  eight  continuous  liours 
was  taken  to  be  a full  da3^s’  work;  that  tiie  restrictions 
of  a day’s  work  to  tliat  number  of  hours  would  pro- 
mote morality,  improve  the  physical  and  intellectual 
condition  of  laborers  and  workmen,  and  enable  them 
the  better  to  discharge  the  duties  appertaining  to  citi- 
zenship. We  have  no  occasion  here  to  consider  these 
questions  or  to  determine  upon  which  side  is  the 
sounder  reason ; for  whatever  inav  have  been  the  mo- 
tives controlling  the  enactment  of  the  statute  in  ques- 
tion, we  can  imagine  no  possible  ground  to  dispute  the 
power  of  the  state  to  declare  that  no  one  undertaking 
work  for  it  or  for  one  of  its  municipal  agencies  should 
permit  or  require  an  employee  on  such  work  to  labor 
in  excess  of  eight  hours  each  day,  and  to  inflict  pun- 
ishment upon  those  vv^lio  are  embraced  by  such  regu- 
lations and  yet  disregard  them.  ' It  cannot  be  deemed 
a part  of  the  liberty  of  any  contractor  that  he  be  al- 
lowed to  do  public  work  in  any  mode  he  may  choose  to 
adopt,  without  regard  to  the  wishes  of  the  state,  on 
the  contrary  it  belongs  to  the  state,  as  the  guar- 
dian and  trustee  for  its  people,  and  having  control 
of  its  affairs,  to  prescribe  the  conditions  upon  Which 
it  will  permit  public  work  to  be  done  on  its  behalf,  or 
on  behalf  of  its  municipalities.  No  court  has  author- 
ity to  review  its  action  in  that  respect.  Kegulations 
on  this  subject  suggest  only  considerations  of  public 
policy.  And  with  such  considerations  the  courts  have 
no  concern. 

^‘If  it  be  contended  to  be  the  right  of  every  one  to 
dispose  of  his  labor  upon  such  terms  as  he  deems  best, 
— as  undoubtedly  it  is, — and  that  to  make  it  a crimi- 
nal offense  for  a contractor  for  public  work  to  permit 
or  require  his  employes  to  perform  labor  upon  that 
work  in  excess  of  eight  hours  each  day  is  in  deroga- 
tion of  the  liberty  both  of  employees  and  employer,  it 
is  sufficient  to  answer  that  no  employee  is  entitled,  of 
absolute  right  and  as  a part  of  his  liberty,  to  perform 
labor  for  the  state;  and  no  contractor  for  public  work 
can  excuse  a violation  of  his  agreement  with  the  state 
by  doing  that  which  the  statute  under  which  he  pro- 
ceeds distinctly  and  lawfully  forbids  him  to  do.” 


64 


And  again  at  L.  Ed.,  page  158 : 

‘‘We  are  reminded  bj  counsel  that  it  is  the  solemn 
duty  of  the  courts  in  cases  before  them  to  guard  the 
constitutional  rights  of  the  citizen  against  merely  ar- 
bitrary power.  That  is  unquestionably  true.  But  it 
is  equally  true — indeed,  the  public  interests  impera- 
tively demand — that  legislative  enactments  should  be 
recognized  and  enforced  by  the  courts  as  embodying 
the  will  of  the  people,  unless  they  are  jdainly  an^  palp- 
ably, beyond  all  question,  in  violation  of  the  founda- 
mental  law  of  the  Constitution.  It  cannot  be  affirmed 
of  the  statute  of  Kansas  that  it  is  plainly  inconsistent 
with  that  instrument;  indeed,  its  constitutionality  is 
beyond  all  question.  * ♦ * 

‘‘Some  stress  is  laid  on  the  fact  stipulated  by  the 
parties  for  the  purposes  of  this  case,  that  the  work 
performed  by  defendant's  employee  is  not  dangerous 
to  life,  limb,  or  health,  and  that  daily  labor  on  it  for 
ten  hours  would  not  be  injurious  to  him  in  any  way. 
In  the  view  we  take  of  this  case,  such  considerations 
are  not  controlling.  We  rest  our  decision  upon  the 
broad  ground  that  the  work  being  of  a public  char- 
acter, absolutely  under  the  control  of  the  sdate  and  its 
municipal  agents  acting  by  its  authority,  it  is  for  the 
state  to  prescribe  the  conditions  under  which  it  will 
permit  work  of  that  kind  to  be  done.  Its  action  touch- 
ing such  a matter  is  final  so  long  as  it  does  not,  by  its 
regulations,  infringe  the  personal  rights  of  others, 
and  that  has  not  been  done.’^ 

Atl'in  V.  Kansas,  191  U.  S.  205  (L.  Ed.  148-159). 

This  decision  like  many  of  the  others  recognizes  the  lib- 
erty of  contract  in  non  dangerous  transactions  of  a private 
nature  but  "not  as  ‘applied  to  public  work. 


05 


II. 

THE  HELATIOE^E  OF  THE  EEOPLE  TO  THE  GOY- 
ERYMEYTE  OE  THE  UNITED  STATEE  AND  OF  THE 
EEYERAL  ETsVTEE  ARE  BASED  UPON  CONTRACT 
TO  AVHICH  INDIVIDUsYL  RIGHTS  ARE  ENOUGH 
SUBJECTED  TO  PROTECT  THE  GENERAL  Y'EL- 
FARE,  AT  LEAST  UNDER  THE  POLICE  POWER. 

The  ‘A'ontract  thconj”  was  the  basis  of  the  American 
constitutional  ^system. 

The  first  writer  Avho  iiiaintaiuecl  the  idea  on  the  eastern 
continent  was  Johannes  Althnsins,  in  the  beginning  of  the 
seventeenth  century;  but  the  first  work  in  England  was 
Hooker’s  Ecclesiastical  Polity. 

See  AViUoughby,  Nature  of  State,  Ch.  IV,  p.  62. 

LowelVs  Essays  on  Government  (social  compact). 

Hooker  was  a clergyman  of  the  Church  of  England  and 
it  is  claimed  that  he  originated  this  theory  in  1591,  for 
the  purpose  of  defending  the  established  church  against 
its  enemies. 

Lowell's  Essays  on  Government,  (social  compact). 

^Y^illoughby,  Nature  of  State,  Ch.  IV,  62. 

Lowell  thinks  that  the  idea  that  the  rules  derived  their 
authority  from  the  people  was  not  new,  yet  the  deduction 
of  the  lawfulness  of  laws  from  the  voluntary  association  of 
individuals  was  new.  The  first  and  perhaps  the  most  for- 
mal social  compact  known  to  history  was  made  Xov.  11th, 
1620,  in  the  cabin  of  the  Mayflower;  it  was  in  writing, 
signed  by  all  the  parties,  and  was  clear  and  explicit. 

See  copy  of  Loivell's  Essays  on  Government. 


66 


The  theory  was  taken  up  bv  Hugo  Grotiiis  in  1625,  in  his 
w ork  J ure  Belli  ct  Pads:’  He  said  : 

‘‘That  the  mother  of  natural  law  is  nature  itself  and 
the  mother  of  civil  law  is  that  very  obligation  which 
arises  from  consent,  which,  deriving  its  force  from  the 
law  of  nature,  niav  be  called,  as  it  Avere,  the  great 
grandmother  of  this  law  also.’’ 

Lowell  also  savs  that  in  ‘-The  Tenure  of  Kings  & Magis- 
trates,’’ Avritten  in  1619,  Stilton,  in  justification  of  Charles 
I.,  traces  tlie  outlines  of  the  same  principles  afterAvards 
developed  bv  Locke.  He  further  says  that  Hobbes  took 
up  the  theory  in  1651  to  support  the  doctrine  of  the  un- 
limited poAver  of  the  king  and  tliat  Hobbes  founded  all 
justice  and  laAv  upon  a mutual  transfer  of  rights  by  con- 
tract. 

This  theory  enabled  the  English  Convention  to  retain 
the  croAvn  of  James  II.  by  the  folloAving  resolution:  “That 
King  James  the  second,  having  endeavored  to  subvert  the 
CQUstitution  of  the  kingdom,  by  breaking  the  original  con- 
tract between  King  and  people,  and  having,  by  the  advice 
of  Jesuits  and  other  wicked  persons,  violated  the  funda- 
mental laAvs,  and  having  Avithdrawn  himself  out  of  this 
Kingdom,  has  abdicated  the  government,  and  that  the 
throne  is  thereby  vacant.’’ 

About  two  years  later  John  Locke  published  his  treatise 
on  Government.  Lowell  says  that  Locke  began  Avith  the 
only  proposition  common  to  all  writers  of  the  theory 
school — “that  in  a state  of  nature  all  men  are  equal’’ ; that 
Locke  said  a political  society  was  formed  “when  a num- 
ber of  men  agTee  to  give  up  to  that  society  their  individual 
rights  of  punishing  offenders,  and  of  exacting  by  their  own 
force,redress  for  injuries.  In  so  doing  they  consent  that  a 
majority  (unless  there  is  a stipulation  for  a larger  proper- 


67 


tion),  shall  have  power  to  make  aud  execute  laws  neces- 
sary to  accomplish  the  purposes  for  which  the  society  is 
formed,  and  shall  have  authoritj^  to  call  upon  each  man  to 
employ  his  force  to  carry  out  the  judgment  of  the  society.’’ 
In  his  Theory  of  the  'State,  Buntschli  says : 

^‘That  the  contract  theory  is  applied  quite  different- 
ly by  Hobbes,  Locke  and  Rosseau;  that  according  to 
Hobbes  men  only  pass  from  a state  of  nature  to  the  so- 
cial state  by  surrendering  their  rights  to  a sovereign, 
one,  few  or  many  (Leviathan,  Ch.  IT)  ; that  Locke 
supposes  rights,  e.  g.,  of  liberty  and  property,  to  exist 
in  the  state  of  nature  by  the  original  compact,  and 
that  a form  of  government  is  instituted  to  secure  these 
rights  (Treatise  on  Gov.,  B.  II,  C.  6,  Sec.  2)  ; that  ac- 
cording to  Rosseau  men  pass  from  the  state  of  nature 
to  the  social  state  by  the  social  contract  (as  in  Hobbes’ 
theory),  but  that  the  sovereign  to  which  each  surren- 
ders his  rights  is  the  people,  so  that  each  is  sovereign 
as  well  as  subject  (Cont.  Soc.  I.,  Ch.  6,  this  sovereign- 
ty is  inalienable,  II,  C.  I;  III,  C.  16)  ; that  since  the 
time  of  Rosseau  the  contract  theory  has  enjoyed  great 
and  widespread  popularity.” 

In  the  discussion  of' vested  rights,  the  court  said,  in 
Gothen  v.  Stonington,  4 Conn.,  at  225: 

^^Should  there  exist  what  I know  is  not  only  an  in- 
credible supposition,  but  a most  remote  improbability, 
a case  of  the  direct  infraction  of  vested  rights,  too  pal- 
pable to  be  questioned  and  too  unjust  to  admit  of  vin- 
dication, I could  not  avoid  considering  it  as  a viola- 
tion of  the  social  compact,  and  within  the  control  of 
the  Judiciary.” 

The  constitution  of  Mass.  (1870)  says: 

^^The  body  politic  is  formed  by  a voluntary  associa- 
tion of  individuals;  it  is  a social  compact  by  which 
the  whole  people  covenants  with  each  citizen  and  each 
citizen  with  the  whole  people,  that  all  shall  be  govern- 
ed by  certain  laws  for  the  common  good.” 

The  constitution  of  New  Hampshire  says : 

^^All  men  are  born  equally  free  and  independent; 


68 


therefore  all  goverument  of  right  originates  in  the  peo- 

* pie,  is  founded  in  consent,  and  instituted  for  the  gen- 
eral good  of  all.’’ 

The  constitution  of  Virginia  says : 

‘‘That  all  men  are  by  nature  equally  free  and  inde- 
pendent and  have  certain  inherent  rights,  of  which, 
wlien  they  enter  into  a state  of  society,  they  cannot, 
by  anj  compact,  deprive  or  divest  their  posterity, 
namely,  their  enjoyment  of  life  and  liberty,  with  the 
means  of  acquiring  and  possessing  property,  and  pur- 
suing happiness  and  safety.” 

The  constitution  of  Maryland  says : 

“All  government  ,of  right  originates  from  the  peo- 
ple, is  founded  in  compact  only,  and  instituted  solely 
for  the  good  of  the  whole.” 

Story  on  the  C on st it utiony quoting  from  Number  43  of 
“The  Federalist,”  says: 

‘‘The  fabric  of  American  Empire  ought  to  rest  on  a 
solid  basis  of  the  consent  of  the  people.  The  streams 
of  national  power  ought  to  flow  immediately  from  that 
pure,  original  fountain  of  all  legitimate  authority.” 
See  Note  from  Coke,  19  Dill.  Mun.  Corps. 

It  is  evident  from  both  the  letter  and  the  spirit  of  the 
Declaration  of  Independence  that  this  theory  prevailed  in 
the  colonies  at  the  time  of  its  adoption. 

In  Calcler  v.  Bull,  3 Dali.,  at  394,  L.  Ed.  651,  Chase,  J., 
(IT.  S.  Sup.  Court)  said: 

“It  seems  to  me  that  the  right  of  property,  in  its 
origin  could  only  arise  from  compact,  express  or  im- 
plied, and  I think  it  the  better  opinion,  that  the  right 
as  well  as  the  mode  or  manner  of  acquiring  property, 
and  of  alienation  of  transferring,  inherited  or  trans- 
mitting it,  is  conferred  by  society;  is  regulated  by  civil 
institution,  and  is  always  subject  to  the  rules  pre- 
scribed by  positive  law.” 

This  general  right  is  applicable  here  if  the  public  good 
requires  its  exercise. 


09 


In  Mium  V.  lUinois,  94  l\  S.  113,  L.  Ed.  83-84,  tlie  (jiies- 
tion  Ava,s  whether  a grain  elevator  sliould  be  sul>jected‘ to 
(Control  hj  the  state,  and  wliile  tlie  discnssion  was  on  tliat 
question,  the  language  of  the  court  is  such  as  to  show  the 
theory  upon  which  the  police  power  rests; 

‘^When  one  becomes  a member  of  society,  he  neces- 
sarily parts  Avith  some  rights  or  privileges  which,  as 
an  individual,  not  affected  by  his  relations  to  others, 
he  might  retain.  body  politic,’  as  aptly  defined  in 
the  preamble  of  the  Constitution  of  Massachusetts,  ds 
a social  compact  by  Avhich  the  Avhole  people  covenants 
Avith  each  citizen,  and  each  citizen  Avith  the  Avhole 
people,  that  all  shall  be  governed  by  certain  laAVS  for 
the  common  good.’  This  does  not  confer  poAver  upon 
the  Avhole  people  to  control  rig^its  which  are  purely 
and  exclusively  private.  Thorpe  v.  R.  R.  Co.,  27  Yt. 
143,  but  it  does  authorize  the  establishment  of  laws 
requiring  each  citizen  to  so  conduct  himself  and  so 
use  his  own  property  as  not  unnecessarily  to  in- 
jure another.  This  is  the  yery  essence  of  gOA^ern- 
ment,  and  has  found  expression  in  the  maxim, 
Sic  vtcre  tiio  vt  alicnum  non  laedas.  From  this 
source  come  the  police  powers,  which  as  was  said  by 
Chief  Justice  Taney  in  The  License  Cases,  '5  How. 
583j  C4re  nothing  more  or  less  than  the  powers  of  gov- 
ernment inherent  in  every  sovereignty — ^that  is  to  say, 
— the  power  to  govern  men  and  things.’  Under  these 
povrers  the  government  regulates  the  conduct  of  its 
citizens  one  towards  another,  and  the  manner  in 
which  each  shall  use  his  own  property,  when  such  reg- 
ulation becomes  necessary  for  the  public  good.” 

In  Adair  v.  United  States,  208  U.  S.  161,  the  court  in  re- 
ferring to  the  police  poAA^ers  said: 

^^Both  property  and  liberty  are  held  on  such  rea- 
sonable conditions  as  may  be  imposed  by  the  govern- 
ing power  of  the  state  in  the  exercise  of  those  powers, 
and  with  such  conditions  the  14th  amendment  was 
not  designed  to  interfere.  * * *” 

Under  this  theory  the  public — ^the  general  welfare — is 
protected  and  secured.  The  development  of  this  study  will 


70 


show  that  the  courts  recognize  these  mutual  obligations 
and  restrictions  as  betAveen  the  states  and  the  indiAuduals 
on  the  question  of  indiyidual  rights. 


Police  Power  Defined. 

The  right  to  purchase  or  to  sell  labor  is  part  of  the  liber- 
ty protected  by  this  (14th)  Amendment  unless  there  are 
circumstances  wliich  excludes  the  right. 

In  the  Adah'  case,  208  U.  S.  161,  L.  Ed.  436,  Mr.  Justice 
Harlan  said: 

' ‘^There  are,  lioweA^er,  certain  powers  existing  in  the 
soA^ereignty  of  each  state  in  the  Union,  someAA'hat 
A^aguely  termed  ^police  poAA^er,’  the  exact  description 
and  limitation  of  AA'hich  liaA^e  not  been  attempted  by 
the  courts.  Those  poAA'ers,  broadly  stated,  and  with- 
out, at  present,  any  attempt  at  a more  specific  limita- 
tion, relate  to  the  safety,  health,  morals,  and  general 
Avelfare  of  the  public.” 

In  Holden  v.  Hardy,  169  U.  S.  366,  (L.  Ed.  380)  the  couid 
said : 

^‘While  this  power  is  inherent  in  all  governments,  it 
has  doubtless  been  greatly  expanded  in  its  application 
during  the  past  century,  owing  to  an  enormous  in- 
crease in  the  number  of  occupations  which  are  danger- 
ous, or  so  far  detrimental  to  the  health  of  employees 
as  to  demand  special  precaution  for  their  AA*ell-being 

and  protection,  or  the  safety  of  adjacent  property. 
* * * ' 

^‘This  power  legitimately  exercised  can  neither  be 
limited  by  contract  nor  bartered  away  by  litigation. 

^‘While  this  power  is  necessarily  inherent  in  every 
form  of  gOA^ernment,  it  was,  prior  to  the  adoption  of 
the  Constitution,  but  sparingly  used  in  this  country.” 
Holden  v.  Hardy,  169  U.  S.  366  (L.  Ed.  780-93). 

With  respect  to  the  development  of  the  resources  of  the 
country  the  court  continues : 


71 


we  were  then  almost  purely  an  agricultural  peo- 
ple, the  occasion  for  any  special  protection  of  a par- 
ticular class  did  not  exist.  Certain  protitable  employ- 
ments, such  as  lotteries  and  the  sale  of  intoxicating 
liquors,  which  were  then  considered  to  be  legitimate, 
have  since  fallen  under  the  ban  of  public  opinion,  and 
are  now  either  altogether  prohibited,  or  made  subjecr. 
to  stringent  police  regulations.  The  power  to  do  this 
has  been  repeatedly  affirmed  by  this  court.  * * * 

‘‘While  the  business  of  mining  coal  and  manufac- 
turing iron  began  in  Pennsylvania  as  early  as  171G, 
and  in  Virginia,  North  Carolina,  and  Massacliusetts 
even  earlier  than  this,  both  mining  and  manufactur- 
ing were  carried  on  in  such  a limited  way  and  by  such 
primitive  methods  that  no  special  laws  Avere  consid 
ered  necessary,  prior  to  the  adoption  of  tlie  Constitu- 
tion, for  the  protection  of  the  operatiA^es,  but,  in  tiie 
Amst  proportions  which  these  industries  haA^e  since  as- 
sumed, it  has  been  found  that  they  can  no  longer  be 
carried  on  with  due  regard  to  the  safety  and  health 
of  those  engaged  in  them,  without  special  protection 
against  the  dangers  necessarily  incident  to  these  em- 
ployments. In  consequence  of  this,  laws  have  been 
enacted  in  most  of  the  states  designed  to  meet  these 
exigencies  and  to  secure  the  safety  of  persons  peculi- 
arly exposed  to  those  dangers.  Within  this  general 
catagory  are  ordinances  providing  for  fire  escapes  for 
hotels,  theaters,  factories,  and  other  large  buildings,  a 
municipal  inspection  of  boilers,  and  appliances  de- 
signed to  secure  passengers  upon  railways  and  steam- 
boats against  the  dangers  necessarily  incident  to  these 
methods  of  transportation.  In  states  where  manufac- 
turning  is  carried  on  to  a large  extent,  provision  is 
made  for  the  protection  of  dangerous  machinery 
against  accidental  contact,  for  the  cleanliness  and 
ventilation  of  working  rooms,  for  the  guarding  of  well 
holes,  stairways,  elevator  shafts,  and  for  the  employ- 
ment of  sanitary  appliances.  In  others,  where  min- 
ing is  the  principal  industry,  special  provision  is  made 
for  the  shoring  up  of  dangerous  avuIIs,  for  ventilation 
shafts,  bore  holes,  escapement  shafts,  means  of  sig- 
nalling the  surface,  for  the  supply  of  fresh  air  and 
the  elimination,  as  far  as  possible,  of  dangerous  gases, 
for  safe  means  of  hoisting  and  lowering  cages,  for  a 


72 


limitation  upon  the  number  of  persons  permitted  to 
enter  a cage,  that  cages  shall  be  covered,  and  that  there 
shall  be  fences  and  gates  around  the  top  of  shafts, 
besides  other  similar  precautions.  * * * 

“These  statutes  have  been  repeatedly  enforced  by 
the  courts  of  the  several  states;  their  validity  assumed, 
and,  so  far  as  we  are  informed,  they  have  been  uni- 
formly held  to  be  constitutional.  * * * 

‘‘But  if  it  be  within  the  power  of  a legislature  to 
adopt  such  means  for  the  protection  of  the  lives  of  its 
citizens,  it  is  difficult  to  see  why  precautions  may  not 
also  be  adopted  for  the  protection  of  their  health  and 
morals.  It  is  as  much  for  the  interest  of  the  state  that 
the  public  health  should  be  preserved  as  that  life 
should  be  made  secure.  With  this  end  in  view  quar- 
antine laws  have  been  enacted,  in  most  if  not  all  of  the 
states;  insane  asylums,  public  hospitals,  and  institu- 
tions for  the  care  and  education  of  the  blind  estab- 
lished, and  special  measures  taken  for  the  exclusion 
of  infected  cattle,  rags,  and  decayed  fruit.  In  other 
states  laws  have  been  enacted  limiting  the.  hours  dur- 
ing‘which  women  and  children  shall  be  employed  in 
factories;  and  while  their  constitutionality,  at  least 
as  applied  to  women,  has  been  doubted  in  some  of  the 
states,  they  have  been  generally  upheld.’^ 

Holden  v.  Hardy,  169  U.  S.  366  (L.  Ed.  780-91). 

In  Hugler  v.  Kansas,  123  U.  S.  623,  it  is  said: 

“By  the  settled  doctrines  of  this  court  the  police 
power  extends,  at  least,  to  the  protection  of  the  lives, 
the  healtli  and  the  property  of  the  community  against 
the  injurious  exercise,  by  any  citizen  of  his  own  rights. 
State  legislation,  strictly  and  legitimately  for  police 
purposes,  does  not  in  the  sense  of  the  Constitution, 
necessarily  intrench  upon  any  authority  which  has 
been  confided,  expressly  or  by  implication,  to  the  Na- 
tional Government.’’ 


73 


III. 

THE  COMMERCE  CL  ACHE  OF  THE  FEDERAL 
CONSTITUTION  CRANTS  TO  CONGRESS  THE 
RIGHT  TO  CONTROL  RELATIONS  OF  MASTER 
AND  SERVANT  IN  SO  FAR  AS  NEEDED  IN  SUCH 
COMMERCE,  BUT  DOES  NOT  GRANT  TO  THE  FED- 
ERAL GOVERNMENT  THE  RIGHT  TO  DEPRIVE 
THE  STATE  OF  ITS  POLICE  POWER  OR  TO  REGU- 
LATE STATE  COMMERCE. 

• 

(a)  Tlie  commerce  clause  was  not  iutended  to,  and  does 
not,  take  away  tlie  police  power  of  the  states. 

(b)  The  states  execute  the  police  power  even  with  re- 
spect to  interstate  commerce  but  do  so  for  their  self  pro- 
tection and  only  to  such  extent  as  not  to  amount  to  regu- 
lation in  the  constitutional  sense. 

That  clause  reads : 

^‘The  Congress  shall  haye  power ; * * * To 

regulate  commerce  with  foreign  nations,  and  among 
the  seyeral  states,  and  with  the  Indian  tribes.  ^ 
Const,  of  U.  S.,  Art.  1,  Sec.  8. 

Since  the  decision  of  the  Supreme  Court  in  Hoioard  v. 
III.  Cent.  R.  R.  Co.,  207  U.  S.  463  (L.  Ed.  297),  there  is  no. 
longer  any  doubt  but  that  in  so  far  as  the  relations  of 
employer  and  employe  are  concerned,  they  are  under  the 
control  of  Congress  when  a part  of  the  means  or  adminis- 
tration of  the  commerce  clause,  but  are  not  so  yrhen  they 
relate  to  purely  intrastate  commerce. 

With  respect  to  whether  or  not  the  act  of  June  11,  1906, 
regulated  commerce  the  court  said : 

^^We  think  the  unsonndness  of  the  contention  that, 
because  the  act  regulates  the  relation  of  master  and 


74 


servant,  it  is  unconstitutional,  because,  under  no  cir- 
cumstances, and  to  no  extent,  can  the  regulation  of 
such  subject  be  within  the  grant  of  authority  to  regu- 
late commerce,  is  demonstrable.  We  say  this  because 
we  fail  to  perceive  any  just  reason  for  holding  that 
Congress  is  without  power  to  regulate  the  relation  of 
master  and  servant,  to  the  extent  that  regulations 
adopted  by  Congress  on  that  subject  are  solely  confined 
to  interstate  commerce,  and  therefore  are  within  the 
grant  to  regulate  that  comniercej  or  within  the  au- 
thority given  to  use  all  means  appropriate  to  the  exer- 
cise of  the  powers  conferred.  * * * 

^^It  cannot  be  said  that  because  a regulation  adopted 
by  Congress  as  to  such  train  when  so  engaged  in  in- 
terstate commerce  deals  with  the  relation  of  the  mas- 
ter to  - the  servants  operating  such  train  or  the  rela- 
tions of  the  servants  engaged  in  such  operation  be- 
tween themselves,  that  it  is  not  a regulation  of  inter- 
state commerce.  This  must  be,  since  to  admit  the  au- 
thority to  regulate  such  train,  and  yet  to  say  that  all 
regulations  which  deal  witli  the  relation  of  master  and 
servants  engaged  in  its  operation  are  invalid  for  want 
' of  power,  would  be  but  to  concede  the  power  and  then 
to  deny  it ; or,  at  all  events,  to  recognize  the  poAver  and 
yet  to  render  it  incomplete.” 

Howard  v.  lU.  Cent.  R.  Co.,  207  U.  S.  461  (L.  Ed. 
297-308). 


The  rule  generally  api)lied  to  delegations  of  Federal  pow- 
er, prevails  Avith  respect  to  this  question,  that  the  states 
may  act  till  Congress  exercises  its  powers. 

Pierce  v.  Van  Dusen,  78  Fed.  693  (6.  C.  C.  A.)  (De- 
cision by  Harlan,  Taft  and  Lurton). 


a. 

The  commerce  clause  does  not  take,  and  was  not  intended 
to  take,  the  police  power  from  the  states;  hut  it  does  give 
to  Congress  such  poiccrs  over  the  subject  as  to  exclude 
state  action  when  Congress  docs  act,  except  what  is  neces- 
sary for  state  protective  measures. 


» 


75 

In  McLemv  v.  Denver  & R.  G.  R.  R.  Co.,  203  U.  S.  38-47, 
(L.  Ed.  78)  it  is  said : 

lias  been  too  frequently  decided  by  tlijs  court  to 
require  the  restatement  of  the  decisions,  tliat  the  ex- 
clusive power  to  regulate  interstate  commerce  is  vest- 
ed by  the  Constitution  in  Congress,  and  tliat  other 
laws  which  undertake  to  regulate  such  commerce  or 
impose  burdens  upon  it  are  invalid.  This  doctrine 
has  been  reaffirmed  and  announced  in  cases  decided 
as  recently  as  the  last  term  of  tliis  court.  While  this 
is  true,  it  is  ecpially  Avell  settled,  that  a state  or  terri- 
tory, for  the  same  reasons,  in  the  exercise  of  the  po- 
lice power,  may  make  rules  and  regulations  not  con- 
flicting with  the  legislation  of  Congress  upon  tlie  same 
subject,  and  not  amounting  to  regulations  of  inter- 
state commerce.  It  will  only  be  necessary  to  refer  to 
a few  of  the  man}^  cases  decided  in  this  court  holding 
valid  enactments  of  lea’islatures  having  for  their  ob- 
ject the  protection,  welfare  and  safety  of  the  people, 
although  such  laws  may  have  an  effect  upon  inter- 
state commerce.  The  principle  decided  in  these  cases 
is  that  a state  or  territory  has  the  right  to  legislate 
for  the  safetv  and  welfare  of  its  people,  and  that  this 
right  is  not  taken  from  it  because  of  the  exclusive  right 
of  Congress  to  regulate  interstate  commerce,  except 
in  cases  where  the  attempted  exercise  of  authority  by 
the  legislature  is  in  conflict  with  an  act  of  Congress, 
or  is  an  attempt  to  regulate  interstate  commerce.’’ 

In  the  Aclwir  case,  208  U.  iS.  161,  (L.  Ed.  436)  Mr.  Jus- 
tice Harlan  said : 

uThere  are,  however,  certain  powers  existing  in  the 
sovereignty  of  each  state  in  the  Union,  somewhat 
vaguely  termed  ^police  power,’  the  exact  description 
and  limitation  of  which  have  not  been  attempted  by 
the  courts.  Those  powers,  broadly  stated,  and  with- 
out, at  present,  any  attempt  at  a more  specific  limita- 
tion, relate  to  the  safety,  health,  morals,  and  general 
welfare  of  the  public.  Both  property  and  liberty  are 
held  on  such  reasonable  conditions  as  may  be  imposed 
by  the  governing  power  of  the  state  in  the  exercise  of 
those  powers,  and  with  such  conditions  the  14th 
amendment  v/as  not  designed  to  interfere.” 


76 


This  makes  it  clear  that  in  the  exercise  of  the  police  pow- 
er reasonable  regulations  may  be  made  even  though  they 
may  affect  interstate  commerce;  provided  they  do  not  con- 
flict with  the  action  of  Congress  or  attempt  to  regulate 
interstate  commerce. 

b. 

The  states  execute  the  police  power  within  the  states. 

The  state’s  police  power  can  only  interfere  with  inter- 
state commc7'ce  for  self  protection. 

In  Railway  Co.  u.  Hu4on,  95  U.  S.  465,  L.  Ed.  530-1,  in 
reaching  the  conclusion  that  the  State  of  Missouri  had  un- 
duly regulated  interstate  commerce  the  court  stated  in  ef- 
fect that  while  the  police  power  was  not  granted  over  such 
commerce  to  the  federal  government  the  rights  were  so 
nearly  granted  as  to  compel  the  courts  to  guard  it  with 
diligence  against  needless  intrusion  but  admitted  the  fol- 
lowing principles : 

^^We  are  tlius  brought  to  the  question  whether  the 
Missouri  Statute  is  a lawful  exercise  of  the  police 
power  of  the  state.  We  admit  that  the  deposit  in 
Congress  of  the  poAver  to  regulate  foreign  commerce 
and  commerce  among  the  states  was  not  a surrender 
of  that  which  may  properly  be  denominated  police 
power.” 

And  further: 

^^But  whatever  may  be  the  nature  and  reach  of  the 
police  poAver  of  a State,  it  cannot  be  exercised  over  a 
subject  confided  exclusively  to  Congress  by  the  Fed- 
eral Constitution.  It  cannot  invade  the  domain  of 
tJie  National  GoA^ernment.” 


And  further: 

^‘]\IanY  acts  of  a State  may,  indeed,  affect  Com- 
merce, witlioiit  amoiintinj^  to  a rejiulation  (;f  it,  in  tlie 
constitutional  sense  of  the  term.  And  it  is  some- 
times difficult  to  define  tlie  distinction  betwcH^n  tliat 
wliich  merely  affects  or  inffnences,  and  that  wliich 
re<?nlates  or  fnrnislies  a rule  for  conduct.  There  is 
no  such  difficulty  in  the  present  case.  AVhile  we  un- 
hesitatingly admit  that  a State  may  pass  sanitary 
laws,  and  laws  for  the  protection  of  life,  liberty, 
health  or  property  within  its  borders;  while  it  may 
prevent  persons  and  animals  suffering  under  conta- 
gious and  infectious  disease,  or  convicts,  etc.,  from  en- 
tering the  state;  Avhile  for  the  purpose  of  self  protec- 
tion it  may  establish  (piarantine,  and  reasonable  in- 
spection laws,  it  may  not  interfere  with  transporta- 
tion into  or  through  the  state,  beyond  what  is  abso- 
lutely necessary  for  its  self  protection.’’ 

In  the  case  of  Mayor,  Alderman,  et  aJ.  of  New  York  v. 
Miln,  11  Peters,  102,  L.  Ed.  660-62-G4,  there  is  an  elaborate 
opinion  on  the  police  powers.  In  February,  1824,  the  leg- 
islature of  Xew  York  passed  an  act  providing  that  the 
Master  of  every  vessel  arriving  in  Xew  York  from  a foreign 
port,  or  from  a port  of  any  of  the  states  other  than  X^ew 
York,  was  required  under  certain  penalties  within  a cer- 
tain time  to  report  in  writing,  containing  the  names,  ages, 
and  last  local  settlement  of  every  person  who  should  have 
been  on  board  the  vessel  during  the  voyage,  and  that  if  any 
of  the  passengers  should  have  gone  on  board  any  other  ves- 
sel and  landed  at  any  other  place  with  a view  to  proceed 
to  Xew  York  the  same  should  be  stated  in  the  report.  The 
corporation  of  the  City  of  Xew  York  instituted  an  action 
under  this  law  for  debt  against  the  Master  of  the  ship 
Emily  to  recover  the  penalties  imposed  by  this  act,  etc. 
The  defendant  demurred  to  the  declaration  and  the  judges 
of  the  circuit  court  being  divided  in  opinion  as  to  whether 


78 


or  not  this  act  regulated  trade  and  commerce  between  Xew 
York  and  foreign  ports  and  was  therefore  unconstitutional 
and  void,  certified  the  case  to  the  Supreme  Court.  The 
Supreme  Court  reached  the  conclusion  that  it  was  not  a 
regulation  of  commerce  but  of  police.  That  court  held 
that  all  those  powers  which  relate  to  merely  municipal  leg- 
islation or  which  may  more  properly  be  called  internal  po- 
lice are  not  surrendered  or  restrained  consequently,  in  re- 
lation to  them  the  authority  of  a state  is  complete,  umpial- 
ified  and  exclusive. 

The  court  said  on  page  134 : 

^‘We  shall  not  enter  into  any  examination  of  the 
question  whether  the  power  to  regulate  commerce  be 
or  be  not  exclusive  of  the  States,  because  the  opinion 
which  we  have  formed  renders  it  unnecessary;  in  oth- 
er Avords,  we  are  of  opinion  that  tlie  act  is  not  a regu- 
lation of  commerce,  but  of  police;  and  that  being  thus 
considered,  it  was  passed  in  the  exercise  of  a power 
Avhich  rightfully  belonged  to  the  States.’' 

And: 

^The  power,  then,  of  Xew  York,  to  pass  this  laAv 
having  undeniably  existed  at  the  formation  of  the  Con- 
stitution, the  simple  inquiry  is,  whether  by  that  in- 
strument it  Avas  taken  from  the  states  and  granted  to 
Congress;  for  if  it  AA^ere  not  it  yet  remains  with  them. 

‘‘If,  as  Ave  think,  it  be  a regulation,  not  of  commerce 
but  police,  then  it  is  not  taken  from  the  States.’’ 

And : 

“The  Federalist,  in  the  45th  number,  speaking  of 
this  subject,  says  the  poAvers  reserved  to  the  several 
states  Avill  extend  to  all  the  objects,  which  in  the  or- 
dinary course  of  affairs,  concern  the  lives,  liberties 
and  properties  of  the  people,  and  the  internal  order, 
improvement  and  prosperity  of  the  State. 

x“And  this  Court  in  the  case  of  Gibbons  v.  Ocjdai,  (9 
-Wheat.  203),  AAdiich  will  hereafter  be  more  particular- 
ly noticed,  in  speaking  of  the  inspection  laAvs  of  the 


79 


states,  say  the}’'  form  a portion  of  tliat  immense  mass 
of  lei’i slat i oil  wliirli  emljiuices  (‘very tiling  witliin  the 
territory  of  a state  not  surrendered  to  tlui  general  gov- 
ernment, all  of  wliicli  can  be  most  advantageously  ex- 
ercised by  tlie  states  tliemselves.  Inspc^ction  laws, 
quarantine  laws,  bealtb  laws,  of  (‘very  description,  as 
well  as  laws  for  regulating  the  internal  commerce  of 
a state,  and  those  wliicb  respect  turnpike  roads,  fer- 
ries, and  are  component  parts  of  this  mass. 

^^Now,  if  ilie  act  in  question  be  tried  by  reference 
to  the  delineation  of  power  laid  down  in  the  preceding 
quotations,  it  seems  to  us  that  we  are  necessarily 
brought  to  the  conclusion  that  it  falls  within  its  lim- 
its. There  is  no  aspect  in  which  it  can  be  viewed  in 
which  it  transcends  them.  If  we  look  at  the  place  of 
its  operation,  we  find  it  to  be  within  the  territory,  and, 
therefore,  within  the  jurisdiction  of  Xoav  York.  If 
we  look  at  the  person  on  whom  it  operates,  he  is  found 
within  the  same  territory  and  jurisdiction.  If  we  look 
at  the  persons  for  whose  benefits  it  was  passed,  they 
are  the  people  of  New  York,  for  whose  protection  and 
welfare  the  Legislature  of  that  state  are  authorized 
and  in  duty  bound  to  provide. 

^Tf  we  turn  our  attention  to  the  purpose  to  be  at- 
tained, it  is  to  secure  that  very  protection,  and  to  pro- 
vide for  that  very  welfare.  If  we  examine  the  means 
by  which  these  ends  are  proposed  to  be  accomplished, 
they  bear  a just,  natural  and  appropriate  relation  to 
those  ends.” 

With  respect  to  the  difficulties  of  defining  the  police 
power  the  court  continues: 

^^We  choose  rather  to  plant  ourselves  on  what  we 
consider  impregnable  positions.  They  are  these:  that 
a state  has  the  same  undeniable  and  unlimited  juris- 
diction over  all  persons  and  things  within  its  terri- 
torial limits  as  any  foreign  ^nation,  where  that  juris- 
diction is  not  surrendered  or  restrained  by  the  Con- 
stitution of  the  United  States.  That,  by  virtue  of  this, 
it  is  not  only  the  right  but  the  bounden  and  solemn 
duty  of  a state,  to  advance  the  safety,  happiness  and 
prosperity  of  its  people,  and  to  provide  for  its  general 
welfare,  by  any  and  every  act  of  legislation  which  it 


may  deem  to  be  conducive  to  these  ends;  where  the 
power  over  the  particular  subject,  or  the  manner  of 
its  exercise  is  not  surrendered  or  restrained  in  the 
manner  just  stated.  That  all  those  powers  which  re- 
• late  to  merely  municipal  legislation,  or  what  may, 
perhaps,  more  properly  be  called  internal  police,  are 
not  thus  surrendered  or  restrained;  and  that,  conse- 
quently, in  relation  to  these,  the  authority  of  a state 
is  complete,  unqualified  and  exclusive.’’ 

And  further: 

‘‘We  are,  therefore,  of  opinion,  and  do  direct  it  to 
be  certified  to  the  Circuit  Court  for  the  Southern  Dis- 
trict of  Xew  York,  that  so  much  of  the  section  of  the 
act  of  the  Legislature  of  Xew  York  as  applies  to  the 
breaches  assigned  in  the  declaration,  does  not  assume 
to  regulate  commerce  between  the  port  of  Yew  York 
and  foreign  ports,  and  that  so  much  of  said  section  is 
constitutional.” 

It  is  thus  evident  that  while  it  is  sometimes  difficuD  to 
draw  the  line  between  that  which  merely  affects  or  influ- 
ences, as  distinguished  from  that  wliich  rules  or  conducts, 
commerce,  yet  the  state  has  the  right  of  self  preservation 
or  police  and  this  subject  has  reached  a condition  where 
self  preservation  and  police  require  that  its  citizens  be 
protected  and  compensated.  Except  as  herein  shown  the 
states  can  act  as  freely  as  foreign  nations. 


lY. 

THE  POLICE  POWER  OF  THE  SEVERAL  STATES 
WAS  XETER  DELEGATED  BY  THE  FEDERAL  CON- 
STTTUTIOX,  XOR  PROHIBITED  BY  THAT  IXSTRH 
MEXT  FROM  REASOXABLE  STATE  EXERCISE. 

(a)  The  Fourteenth  Amendment  was  not  designed  to 
de.stroy  the  state's  police  power. 


SI 


Police  Power  not  Delegated  or  Proiiiiuted. 

A search  of  the  Feileral  con^Titmiou  fails  to  reveal  any 
delesfatiou  of  the  police  power  within  the  states;  neither 
the  Federal  nor  state  constitutions  have  prohibited  it  to 
the  state,  except  to  the  extent  of  reqnirinp:  equal,  reason- 
able, and  lawful  re^nlations. 

Orgauizcd  socictj/  retains  the  poircr  to  govern  through 
the  police  pofccr. 

This  ji'eneral  ri»rht  is  applicable  here  if  the  public  g:ood 
requires  its  exercise. 

In  Munn  i\  Illinoi.'^,  94  F.  S.  113,  L.  Ed.  S3-S4,  the  ques- 
tion was  whether  a p*ain  elevator  should  be  subjected  to 
control  by  the  state,  and  while  the  discussion  was  on  that 
question,  the  language  of  the  court  is  such  as  to  show  the 
theory  upon  which  the  police  power  exists : ^ 

“When  one  becomes  a member  of  society,  he  neces- 
sarily |>aids  Avith  some  rights  or  privileges  which,  as 
an  individual,  not  affected  by  his  relations  to  others, 
he  might  retain.  * * * From  this  source  come  the  police 
poAvers,  which  as  was  said  by  Chief  Justice  Taney  in 
The  License  Cases,  5 How,  583,  Wre  nothing  more  or 
less  than  the  powers  of  government  inherent  in  every 
sovereignty — that  is  to  say, — ^the  i>ower  to  govern  men 
and  things.'  Under  these  powers  the  government  reg- 
ulates the  conduct  of  its  citizens  one  towards  another, 
and  the  manner  in  which  each  shall  use  his  own  prop- 
erty, when  such  regulation  becomes  necessary  for  the 
public  good.-' 

In  Beer  Companij  i\  Massachusetts.  97  U.  S.  25,  L.  Ed. 
989,  in  a liquor  case  the  court  held  that  all  rights  are  held 
subject  to  the  police  power  of  the  state  and  that  the  legisla- 
ture may  provide  for  the  discontinuance  of  that  which  is 
injurious  to  the  health,  notwithstanding  individuals  or  cor- 
porations may  thereby  suffer  inconvenience,  saying ; 


82 


\ I 

*‘If  the  public  safetj^or  the  public  morals  required 
the  discontinuance  of  any  manufacture  or  traffic  the 
hand  of  the  legislature  cannot  be  stayed  from'  ijrovid* 
ing  for  its  discontinuance  by  any  incidental  inconven- 
ience whicli  individuals  or  corporations  may  suffer.  All 
riglits  are  held  >subject  to  the  judice  ]>ower  of  tlie  state.’’ 

The  court  repeated  in  that  opinion,  what  it  has  laid  down 
in  other  cases,  this  caution : 

‘Ttf  course  we  do  not  mean  to  lay  down  any  rule  at 
variance  with  Avhat  this  couiT  has  decidcnl  with  regard 
to  the  paramount  autliority  of  the  Constitution  and 
laws  of  the  United  States  relating  to  the  regulation 
of  commerce  Avith  foreign  nations  and  among  the  sev- 
eral states  or  otherwise.” 

In  United  Htates  v.  DeWitt,  9 Wall.  41,  L.  Ed.  593-4, 
through  an  opinion  by  Chief  Justice  Chase,  the  Supreme 
Court  said,  in  relation  to  a law  making  it  a misdemeanor 
to  mix  certain  kinds  of  oils: 

^‘As  a xwlice  regulation  relating  exclusively  to  the 
internal  trade  of  the  states,  it  can  only  have  effect 
Avhere  the  legislative  authority  of  CongTess  excludes 
territorially  all  state  legislation  as  for  examxde  in  the 

' District  of  Columbia.  Within  state  limits  it  could 
have  no  constitutional  operation.  This  has  been  so 
frequently  declared  by  this  court;  results  so  obviously 
from  the  terms  of  the  constitution,  and  has  been  so 
fully  explained  and  supported  on  former  occasions, 
that  we  think  it  unnecessary  to  enter  again  upon  the 
discussion.” 

This  makes  it  evident  that  the  police  power,  generally 
speaking,  rests  in  the  state  government,  except  over  such 
territory  as  Congress  has  the  power  to  control. 

In  Muf/ler  v.  Kansas,  123  U.  8^.  623,  L.  Ed.  205-211-212,  it 
is  held  first,  that  laAvful  state  regulation  in  the  exercise 
of  the  police  power  to  prohibit  the  manufacture  and  sale 
of  liquors  may  be  enforced  against  persons  aa’Iio  at  the  time 


83 


happen  to  own  property  wlios^  cliief  value  consists  in  its 
fitness  for  such  inanufacturing’  purpose  without  compen- 
sating’ them  for  the  diminution  in  value  resultiug  from  such 
prohibitory  enactments.  The  constitutionality  of  this  stat- 
ute was  upheld. 

After  discussing  the  fact  that  the  policy  of  such  laws 
rests  with  tiie  legislature  and  not  the  courts  Mr.  Justice 
Harlan  said: 

^‘Xo  one  may  rightfully  do  that  which  the  law  mak- 
ing power  on  reasonable  grounds  declares  to  be  preju- 
dicial to  the  general  welfare.’^ 

The  Court  re-quoted  from  Xew  Orleans  Gas  Co.  v.  Louis- 
iana Light  Co.,  as  follows : 

^^Again,  in  ~New  Orleans  Gas  Light  Co.  v.  Louisiana 
Light  Co.,  115  U.  S.  650,  672,  29  L.  Ed.  516,  521: 
‘The  constitutional  prohibition  upon  state  laws  im- 
pairing the  obligation  of  contracts  does  not  restrict 
the  power  of  the  state  to  protect  the  public  health,  the 
public  morals  or  the  public  safety,  as  the  one  or  the 
other  may  be  involved  in  the  execution  of  such  con- 
tracts. Eights  and  privileges  arising  from  contra^^ts 
with  a State  are  subject  to  regulations  for  the  protec- 
tion of  the  public  health,  the  public  morals,  and  the 
public  safety,  in  the  same  sense,  and  to  the  same  ex- 
tent, as  are  all  contracts  and  all  property,  whether 
ovrned  by  natural  persons  or  corporations.’ 

“The  principle  that  no  person  shall  be  deprived  of 
life,  liberty  or  property  without  due  process  of  law, 
was  embodied,  in  substance,  in  the  Constitutions  of 
nearly  all,  if  not  all,  of  the  states  at  the  time  of  the 
adoption  of  the  Fourteenth  Amendment;  and  it  has 
never  been  regarded  as  incompatible  with  the  prin- 
ciple,— equally  vital,  because  essential  to  the  peace 
and  safety  of  society, — ^that  all  property  in  this  coun- 
try is  held  under  the  implied  obligation  that  the  own- 
ers use  of  it  shall  not  be  injurious  to  the  community.” 


S4 


And  Then  continued  the  principle: 

‘‘Bv  the  settled  doctrines  of  this  court  the  police 
-power  extends,  at  least,  to  the  protection  of  the  lives, 
the  health  and  the  property  of  the  community  against 
the  injurious  exercise,  by  any  citizen  of  his  own  rights. 
State  legislation,  strictly  and  legitimately  for  police 
purposes,  does  not  in  the  sense  of  the  Constitution, 
necessarily  intrench  upon  any  authority  which  has 
been  confided,  expressly  or  by  implication,  to  the  Na- 
tional Government.’’ 

State  police  power  not  delegated  to  the  Federal  govern- 
ment. 

In  the  Civil  Rights  Cases,  109  U.  S.  3,  L.  Ed.  S39-S11,  it 
is  held  that  the  Civil  Rights  Act  pa.ssed  March  1st,  1S75, 
by  the  federal  government  is  unconstitutional  in  two  sec- 
tions as  applied  to  the  states,  because  it  is  not  authorized 
by  either  the  13th  or  14th  amendments  to  the  Constitu- 
tion, and  that  the  14th  amendment  is  jirohibitury  only 
upon  the  states,  and  the  13th  amendment  relates  only  to 
slavery  and  involuntary  servitude.  There  were  a number 
of  cases  decided  in  that  opinion.  One  from  each  of  the 
states,  Kansas,  California,  Missouri,  New  York;  some  of 
them  certified  up  by  the  federal  court,  and  one  taken  up 
on  T^Tit  of  error  from  the  federal  court,  and  the  constitu- 
tionality was  the  question  in  all  of  those  cases.  The  first 
section  provided  in  effect  for  the  full  and  equal  enjoyment 
of  accommodations  in  public  places  of  entertainment  and 
conveyance  by  all  persons  within  the  jurisdiction  of  the 
United  States  except  subject  to  the  conditions  and  limita- 
tions established  by  law  and  applicable  to  all  conditions 
irrespective  of  race,  color  or  previous  servitude.  The  second 
section  provided  that  any  person  who  should  violate  the 
first  section  should  forfeit  and  pay  the  sum  of  five  hundred 


85 


dollars  to  the  person  aggrieved  tf>  be  recovered  in  an  sat- 
tion  of  debt  with  full  costs  and  also  be  deemed  guilt}^  of  a 
inisdenieanor  and  fined  not  less  tlian  |500  nor  nuire  than 
|1000,  or  imprisoned  not  less  tlian  30  days  or  more  than 
one  year,  with  the  provision  that  the  person  might  elect 
to  sue  for  the  penalty  or  to  proceed  with  his  rights  at  com- 
mon law  or  1)3'  statute,  and  that  such  election  would  bar 
other  remed.y,  outside  of  the  criminal  proceedings,  and  that 
a judgment  for  the  penalty  in  favor  of  the  aggrieved  party 
or  ux>on  an  indictment  Avould  be  a bar  to  either  prosecu- 
tion respectively.  The  court  stated  that  no  one  Avould  con- 
tend that  the  poAver  to  pass  such  laAv  existed  in  the  consti- 
tution before  the  amendments  and  said: 

After  quoting  the  14th  amendment  and  stating  that  it 
made  void  all  state  legislation  against  its  provisions  said : 

^‘On  the  Avhole  AA^e  are  of  opinion,  that  no  counte- 
nance of  authority  for  the  passage  of  the  law  in  ques- 
tion can  be  found  in  either  the  13th  or  14th  Amend- 
ments of  the  Constitution.” 

In  Mugler  v.  Kansas,  123  U.  S.  623-667,  requoting  from 
a former  decision,  it  is  said: 

^^That  po AVer,  belonged  to  the  states  when  the  Fed- 
eral constitution  Avas  adopted.  They  did  not  surren- 
der it  and  the,y  all  have  it  now — It  rests  on  the  funda- 
mental princixile  that  every  one  shall  so  use  his  own 
as  not  to  wrong  and  injure  another.” 

This  makes  it  clear  that  it  was  not  the  intention  of  the 
people  to  give  the  jDolice  jDower  oA^er  to  the  federal  goA^em- 
ment  in  matters  within  the  jurisdictions  of  the  states. 
The  court  proceeds  to  hold  that  OongTess  might  legislate 
to  counteract  state  action.  The  whole  opinion  rests  up- 
on the  theory  that  Congress  had  invaded  the  province  of  the 
states  in  the  exercise  of  their  police  power  and  in  matters 
not  delegated  to  Congress  by^tlie  Constitution. 


86 


a. 

The  I '/th  amendment  not  designed  to  destroy  the  staters 
police  potver. 

In  Barhier  v.  Connolly ^ 113  U.  S.  27,  L.  Ed.  923,  it  is 
clearly  lield  that  the  14th  Amendment  is  not  desired  to 
interfere  with  the  police  power  of  the  state.  In  that  case  a 
municipal  ordinance  prohibited  washing  and  ironing  in 
public  laundries  within  territorial  limits  from  ten  o’clock 
at  night  to  six  in  the  morning,  and  it  was  held  purely  a 
police  regulation  within  the  competency  of  the  ordinary 
municipality  to  pass,  saying: 

^^It  would  be  an  extraordinary  usurpation  of  the 
authority  of  the  municipality  if  a federal  tribunal 
should  undertake  to  supervise  such  regulations.” 

And: 

^^But  neither  the  Amendment,  broad  and  comprehen- 
sive as  it  is,  nor  any  other  amendment  was  designed 
to  interfere  with  the  power  of  the  State,  sometimes 
termed  its  police  power.” 

V. 

OF  THE  USUAL  COXSTITUTIONAL  OB- 
JECTIONS AGAINST  LAWS  ARE  NOT  APPLICABLE 
TO  THIS  QUESTION  FOR  THEY  DO  NOT  APPLY  TO 
THE  STATE  IF  IT  STAYS  WITHIN  REASONABLE, 
EQUAL.  AND  LAWFUL  REGULATIONS  OF  DAN- 
GEROUS EMPLOYMENTS. 

(a)  The  first  ten  amendments  to  the  Federal  Constitu- 
tion apply  only  to  the  Federal  Government  and  do  not  re- 
quire the  states  to  give  the  jury  trial  but  probably  would 
require  such  trial  in  the  Federal  Courts. 


87 


Usual  Constitutional  Ohjections  that  do  not  Apply  to 

State  Action. 

The  objections  usually  urged  against  legislation  affect- 
ing changes  of  the  common  law  in  any  material  i>ortions 
and  particularly  this  subject  are  sometimes  said  to  violate 
the  Federal  Constitution  by  reason  of  the  following  pro- 
visions : 

1.  The  5th  Amendment  providing  tliat  no  person  shall : 

‘^Be  deprived  of  life,  liberty  or  property  without  due 
process  of  law;  nor  shall  any  private  property  be  tak- 
en for  public  use  without  just  compensation.-’ 

2.  The  7th  Amendment  provides  that; 

^Tn  suits  at  common  law  Avhere  the  value  in  contro- 
versy shall  exceed  $20.00,  the  right  of  trial  by  jury 
shall  be  preserved  and  no  fact  tried  by  a jury  shall  be 
otherwise  re-examined  in  any  other  court  of  the  Unit- 
ed States  than  according  to  the  rules  of  the  common 
law.” 

All  of  the  provisions  contained  in  the  first  ten  amend- 
ments of  the  Federal  Constitution  may  be  dismissed,  with 
a few  brief  authoritative  citations  from  the  controversy  in 
so  far  as  they  respect  states,  for  it  is  the  uniform  doctrine 
of  the  Supreme  Court  to  hold  those  amendments  to  be  ob- 
ligatory upon  the  Federal  government,  and  not  upon  the 
states.  - 

In  Maxwell  v.  ,Dow,  176  U.  S.  581  (L.  Ed.  597),  the 
court  said: 

^‘That  a jury  composed  as  at  common  law,  of  12 
jurors,  was  intended  by  the  6th  amendment  to  the 
Federal  Constitution,  there  can  be  no  doubt.” 

And  again: 

^‘And  as  the  right  of  trial  by  jury  in  certain  suits 
at  common  law  is  preserved  by  the  7th  Amendment, 


^ 88 


such  a trial  implies  that  there  shall  be  an  unanimous 
verdict  of,  12  jurors  in  all  federal  courts  where  a jury 
trial  is  held.” 

The  court  then  proceeded  to  say  in  effect,  that  it  would 
seem  quite  clear  that  the  Utah  constitution,  under  consid- 
eration, providing  for  8 instead  of  12  jurors,  was  not  suffi- 
cient, if  it  be  held  that  the  6th  amendment  was  applicable 
to  prosecutions  of  citizens  of  the  United  States  in  state 
courts;  but  with  .respect  to  that  constitutional  amendment 
it  repeated  the  often-decided  doctrine,  as  follows : 

^‘They  (referring  to  the  first  10  amendments)  were 
intended  as  restraints  and  limitations  upon  the  pow- 
ers of  the  general  government,  and  were  not  intended 
to  and  did  not  have  any  effect  upon  the  powers  of  the 
respective  states.” 

Again,  in  Ughhanlcs  v.  Armstrong,  208  U.  S.  481  (L. 
Ed.  582),  referring  to  the  6th  and  8tli  Amendments  to  the 
Constitution,  the  court  says : 

^The  claim  rests  upon  an  entire  misapprehension 
of  the  rights  of  the  plaintiff  in  error  under  these 
amendments.  The  6th  .and  8th  amendments  do  not 
limit  the  powers  of  the  states,  as  has  many  times  been 
decided.” 

The  .Supreme  Court  was  asked  to  hold  that  the  14th 
Amendment  of  its  own  force  applied  the  first  ten  to  the 
states,  but  refused  so  to  hold. 

Maxwell  v.  Dow,  176  U.  S.  581  (L.  Ed.  597). 

This  principle  disposes  of  all  of  those  Federal  objections 
to  the  administration  of  laws  in  the  state  courts,  except  un- 
der the  14th  Amendment. 


89 


V 


a. 


J ury  Trial  Could  not  he  Avoided  in  Federal  Court. 

Theoretically  the  Federal  Governiiieiit  has  no  coiiiinon 
law;  but, its  judges  considering  a case  from  a particular 
state  sit  with  power  co-ordin<;ite  with  the  state  courts  to 
determine  what  the  common  law  of  that  state  is  as  appli- 
cable to  the  subject. 

In  Smith  v.  Alabama^  124  U.  tS.  405  (L.  Ed.  508),  the 
court  said: 

^‘There  is  no  common  law  of  the  United  States,  in 
the  sense  of  a national  customaiy  law,  distinct  from 
the  common  law  of  England  as  aclopted  by  the  several 
States  each  for  itself,  applied  as  its  local  law,  and 
subject  to  such  alteration  as  may  be  provided  hj  its 
own  statutes.  Wheaton  v.  Peters,  33  U.  S.  8 Pet.  591 
(L.  Ed.  1055) . A determination  in  a given  case  of  what 
that  laAv  is  may  be  ditferent  in  a court  of  the  United 
States  from  that  which  prevails  in  the  judicial  tribu- 
nals of  a particular  State.  This  arises  from  the  cir- 
stance  that  the  Courts  of  the  United  States,  in  cases 
within  their  jurisdiction,  where  they  are  called  upon 
to  administer  the  law  of  the  State  in  which  they  sit  or 
by  which  the  transaction  is  governed,  exercise  an  inde- 
pendent though  concurrent  jurisdiction,  and  are  re- 
quired to  ascertain  and  declare  the  law  according  to 
their  OAvn  judgment.  This  is  illustrated  by  the  case  of 
A.  Y.  Cent.  B.  R.  Co.  v.  Loclcivood,  84  U.^^S.  17  Wall. 
357  (21  L.  Ed.  627)  where  the  common  law  prevailing 
in  the  state  of  New  York,  in  reference  to  the  liability 
of  common  carriers  for  negligence,  received  a different 
interpretation  from  that  placed  upon  it  by  the  judi- 
cial tribunals  of  the  State,  but  the  law  as  applied  was 
none  the  less  the  law  of  the  State.” 

And  again : 

^^There  is,  however,  one  clear  exception  to  the  state- 
ment that  there  is  no  national  common  law.  The  in- 
terpretation of  the  Constitution  of  the  United  States 


90 


is  necessarily  influenced  by  the  fact  that  its  provis- 
ions are  framed  in  the  language  of  the  English  com- 
mon law,  and  are  to  he  read  in  the  light  of  its  history. 
The  code  of  constitutional  and  statutory  construction 
which,  therefore,  is  gradually  formed  by  the  judgments 
of  this  court,  in  the  application  of  the  Constitution 
and  the  laws  and  treaties  made  in  pursuance  thereof, 
has  for  its  basis  so  much  of  the  common  law  as  may 
be  implied  in  the  subject,  and  constitutes  a common 
law  resting  on  national  authority.  Moore  U.  S.,  91 
U.  S.  270.’’ 

Smith  r.  Alabama,  121  U.  B.  165  (L.  Ed.  50S-512). 


77/c  Siatatcs  of  the  State,  by  Act  of  Congress,  are  Buies 
of  Decision  for  the  Federal  Law  Courts. 

Sec.  721  of  the  Revised  Statutes  of  the  United  States 
provides : 

“Sec.  721.  (Laws  .of  the  states,  rules  of  decision.) 
Tlie  laws  of  the  several  States,  except  where  the  Con- 
stitution, treaties,  or  statutes  of  the  United  States 
otherwise  require  or  provide,  shall  be  regarded  as 
rules  of  decision  in  trials  at  common  law,  in  tn^  courts 
of  the  United  States,  in  cases  where  they  apply.” 

See  Platt  i\  Lccocq,  158  Fed.  723  (8  C.  C.  A.). 

There  is  the  further  rule  that  any  corporation  organized 
under  the  Federal  law  depends  upon  that  law  for  its  ex- 
istence and  therefore  may  litigate  its  cases  in  the  Federal 
court. 

Texas  k Pac.  By.  Co.  v.  Cox,  115  L^.  S.  593,  L.  Ed.  829. 

Any  remedy  provided  must  take  these  facts  as  the  settled 
law  under  the  Constitution. 

The  laws  of  the  state  would  be  administered  in  the  Fed- 
eral Court  as  a rule  of  decision  to  determine  the  right  to 
recovery  and  the  amount  thereof;  but  the  common  law 
injury  in  the  cases  prescribed  by  the  Constitution  would 
be  tried  by  a common  law  jury. 


91 


With  respect  then,  to  trial  by  jury,  the  rijilit  exists  in 
the  Federal  Court,  according  to  the  Federal  Constitution 
and  Amendments,  and  cannot  be  limited  by  acts  of  Con- 
gTess,  or  of  the  states. 

AVitli  respect  to  trial  by  jury  in  tlie  state  courts,  that 
is  a matter  of  state  action. 

This  makes  it  clear  that  the  laws  of  the  state  on  this 
question  Avill  he  enforced  in  the  Federal  courts  as  adding 
to  the  laws  of  Congress,  provided  of  course  they  but  po- 
lice, as  distinguished  from  regulate,  interstate  commerce. 

VI. 

THE  FOURTEEXTH  AMEXDMEXT  TO  THE  FED- 
ERAJD  COXSTITUTIOX  IS  A PROHIBITION  UPON 
THE  STATES,  NOT  UPON  THE  NATIONAL  GOV- 
ERNMENT. 

The  portion  of  which  reads : 

“Xo  state  shall  make  or  enforce  any  law  Avhich  shall 
abridge  the  privileges  or  immunities  of  citizens  of  the 
United  States;  nor  shall  any  state  deprive  any  person 
of  life,  liberty,  or  property,  without  due  process  of 
law;  nor  deny  to  any  person  within  its  jurisdiction  the 
equal  protection  of  the  laws.’’ 

(a)  The  privileges  and  immunities  secured  by  that  in- 
strument are  those  which  belong  to  citizens  of  the  United 
States  as  distinguished  from  states. 

(b)  Equal  protection  of  the  la,ws  is  construed  by  the 
Federal  Courts  as  it  is  by  the  state  courts  to  permit  the 
reasonable  classifications  treating  those  within  the  class 
equally.  This  is  no  bar  to  such  law. 

- (c)  The  due  process  of  law  provided  by  the  Fifth 
Amendment  applies  only  to  the  Federal  Government  but 


92 


in  the  Fourteenth  Amendment  it  is  a prohibition  upon  the 
states. 


(d)  The  Federal  Constitution,  however,  does  not  con- 
trol mere  form  of  procedure  in  or  regulate  the  practice  of 
state  courts.  All  that  it  requires  is  that  at  some  point  in 
the  controversy  there  must  be  a time  and  place  for  the 
court  to  adjudicate  the  legal  liability. 

(e)  It  is  not  taking  private  property  without  due  pro- 
cess of  law  within  the  constitutional  provisions  to  require 
dangerous  employments  to  be  liable  for  the  risks  of  the  in- 
jury without  any  particular  fault  in  the  special  transac- 
tions. 

(f)  The  jury  trial  provided  by  the  state  constitutions 
is  the  trial  of  such  cases  as  embrace  principles  secured  by 
the  constitution  Avhen  it  was  adopted  and  not  a trial  of 
matters  involved  only  in  new  laws  such  as  this  would  be. 

This  amendment  of  its  own  force  is  a prohibition  upon 
the  states — not  upon  the  national  government.  Taking 
these  clauses  up  separately,  what  do  they  mean? 

Certainly  not  to  abridge  the  police  powers  except  as  to 
equal,  reasonable,  and  lawful  action. 


a. 


Privileges  and  Immunities. 

It  seems  to  be  the, general  rule  that  the  privileges  and  im- 
munities of  citizens  of  the  United  States,  guaranteed  by 
the  Federal  Constitution,  are  the  privileges  and  immuni- 
ties given, by  that  instrument,  and  not  the- privileges  and 
immunities  created  by  state  laws. 

Von  Holst ^ also  says  th^t  Cooley,  Principles,  247,  ex- 


93 


expresses  the  indisputable  view  that  tlie  adoption  of  this 
provision  in  the  Fourteenth  Amendnient  was  superfluous 
inasmucli  as  tlie  states  liad  not  the  ri^lit  before,  but  from 
the  adoption  of  the  provision  it  is  evident  tliat  tlie  jirivi- 
leges  and  immunities  of  the  citizens  of  the  United  States 
and  of  the  state  do  not  exactly  correspond  and  calls  atten- 
tion to  tlie  citations  of  the  Federal  Supreme  Court  in  the 
^‘Slaughter  House  Cases/’  IG  Wall.  79,  and  says  that: 

^^In  the  same  case  it  deckled,  however,  that  so  far  as 
the  privileges  and  immunities  of  states  were  concerned, 
their  safety  and  protection  are  incumbent  on  the 
states,  and  were  not  put  by  the  Fourteenth  Amend- 
ment under  the  special  care  of  the  federal  govern- 
ment.” 

Yon  Holst  Const.  Laio,  248. 

The  amendment  gave  no  new  privileges  or  immunities  to 
the  citizens  of  the  states,  but  only  additional  guarantees 
to  those  then  existing. 

See  Bout  well  on  the  Const.,  at  end  of  First  Cent. 
Minor  v.  Hojiper.sett,  21  Wall.  162,  L.  Ed.  627. 

The  office  of  the  United  States  is  limited  to  the  enforce- 
ment of  the  dut}^  of  the  states  to  secure. the  equality  of  im- 
munities and  privileges. 

V.  S.  V.  CruH shank,  92  U.  S.  542,  L.  Ed.  588. 

It  provides  that  persons  in  like  circumstances,  subject  to 
the  same  law  shall  be  entitled  to  the  same  privileges  and 
that  the  law  shall  operate  equally  upon  all  persons  sub- 
ject to  it ; and  the  equal  right  to  resort  to  the  appropriate 
courts  for  redress  cannot  be  prohibited. 

Mo.  V.  Le'ims,  101  U.  S.  22-30,  L.  Ed.  989. 

Mo.  Pac.  Ry.  Go.  v.  Mackey,  121  U.  S.  205,  L.^  Ed.  107. 

In  Minor  v.  Hopper  sett,  21  Wall.  160,  L.  Ed.  627,  the 
court  then  said : 


94 


^^Other  proof  of  like  character  might  be  found,  but 
certainly  more  cannot  be  necessary  to  establish  the 
fact  that  sex  has  never  been  made  one  of  tlie  elements 
of  citizenship  in  the  United  States.  In  this  respect 
men  liave  never  had  an  advantage  over  Avomen.  The 
same  laws  precisely  apply  to  botli.  The  Fourteenth 
Amendment  did  not  effect  the  citizenship  of  Avomen 
any  more  than  it  did  of  men.  In  tliis  particular, 
therefore,  the  riglits  of  ]\Irs.  Elinor  do  not  depend  up- 
on tlie  amendment.  She  liad  ahvays  l)een  a citizen 
from  her  birth,  and  entitled  to  all  the  privileges  md 
immunities  of  citizenship.  The  amepdment  ])r:diib- 
ited  her  privileges  and  immunities  as  a citizen  of  the 
United  States;  but  it  did  not  confer  citizenship  on 
her,  that  she  had  before  its  adoption.’’ 

But  see  Muller  v.  Orcffon,  208  U.  S.  412. 

Wherein  it  is  held  that  the  state  may  regulate  hours  of 
labor  of  Avomeu — even  though  not  for  men — under  the  po- 
Jice  power. 

The  Avhole  tenor  of  the  United  States  Constitution  sIioavs 
that  the  rights  Avhich  it  guarantees  are  those  Avhich  existed 
at  the  time  of  its  enactment,  or  those  Avhich  AA^re  express- 
ly created  by  it. 

This  makes  it  evident  that  it  aa  as  the  understanding  of 
the  people  when  they  adopted  this  provision  that  certain 
rights  and  privileges  existed  Avhich  they  desired  to  ^‘secure” 
— not  ^^grant” — ^to  the  people  of  the  state. 

In  Maxwell  v.  Doic^  176  U.  S.  581  (L.  Ed.  597),  the 
court  discussed  the  14th  Amendment,  and  the  fact  that 
there  is  a citizenship  of  the  United  States  and  of  the  state, 

‘^Which  Avere  distinct  from  each  other,  dependent 
upon  different  characteristics  and  circumstances  in 
the  individual;  that  it  was  only  privileges  and  immuni- 
ties of  the  citizen  of  the  United  States  that  AA^ere  i:»laced 
by  the  amendment  under  the  protection  of  the  Fed- 
eral Constitution,  and  that  the  privileges  and  im- 
munities of  a citizen  of  a state,  Avhatever  they  might 


95 


be,  were  uot  iiiteiuliHl  to  liave  any  additional  i>rotec- 
tion  by  the  paragraph  in  question,  but  they  must  rest 
for  tlieir  security  and  jn*otection  where  they  have  here- 
tofore rested." 

MaxivcJl  r.  Dow,  ITh  U.  S.  581  (1..  Kd.  597  ). 

Tlie  court  calls  attention  tf»  the  fact  that  in  the  case  of 
M'mor  r.  //o/>y>(r.vr//(*,  21  \Vallace,  1(»2,  22  L.  Kd.  (127,  it 
Avas  held: 

^‘It  was  held  that  the  right  (>f  sn  If  rage  was  not  nec- 
essarily one  of  the  privileges  or  iininnnities  of  citizen- 
ship l>efore  the  adoption  of  the  14th  aineudmeut,  and 
although  a woman  was  in  one  sense  a citizen  of  the 
United  States  yet  she  did  not  obtain  the  right  of  suf- 
frage by  the  adoption  of  that  amendment.  The  right 
to  vote  is  a most  important  one  in  onr  farm  of  govern- 
ment, yet  it  is  no-t  given  by  the  amendment." 

The  court  continues  to  review  a nninber  of  cases  on  the 
question,  and,  quoting  from  the  case  of  I)i  rc  KcmmJcr, 
136  U.  S.  436,  L.  Ed.  519,  said : 

Protection  to  life,  liberty  and  property  rests  pri- 
marily with  the  states,  and  the  amendment  fnrnishes 
an  additional  guaranty  against  any  encroachment  by 
the  states  upon  these  fundamental  rights  wbicli  be- 
long to  citizenship  and  which  the  state  governments 
were  created  to  secure.  The  privileges  and  immuni- 
ties of  citizens  of  the  United  States  as  distinguished 
from  the  priAilea'es  and  immunities  of  citizens  of  the 
states  are,  indeed,  protected  by  it ; but  these  are  prhi- 
leges  and  immunities  arising  out  of  the  nature  and 
essential  character  of  the  national  gavernment  and 
granted  and  secured  hy  the  constitution  of  the  Umt- 
ed  States.’  ” 

Later  the  court  said : 

“There  is  no  intimation  here  that  among  the  priAu- 
leges  or  immunities  of  a citizen- of  the  United  States 
are  the  right  of  trial  bv  jury  in  a state  court  for  a 
state  offense,  and  the  right  to  be  exempt  from  any  trial 
for  an  infamous  crime,  unless  upon  presentment  by  a 
grand  jury.” 

3Iawicell  v.  Bow,  176  U.  S.  581  (L.  Ed.  597). 


96 


It  is  clear  then  that  the  right  of  trial  by  a jury  in  a 
state  court  is  not  a privilege  or  immunity  of  the  United 
States,  but  it  probably  would  be  in  the  United  States  Cir- 
cuit Court  at  common  law. 

In  the  Maxicell  case,  supra,  it  was  also  decided  That  the 
adojjtion  of  the  llth  amendment  to  the  Federal  Cons  cita- 
tion did  not  have  the  effect  of  making  all  the  provisions 
contained  in  the  first  ten  amendments  operative  in  state 
courts,  on  the  ground  that  the  fundamental  rights  protect- 
ed by  those  amendments  are,  by  virtue  of  the  14th  amend- 
ment, to  be  regarded  as  privileges  or  immunities  of  citi- 
zens of  the  United  States. 

This  being  a matter  for  state  action,  this  question  has 
no  practical  effect. 


b. 

Equal  Protection. 

Taking  up  equal  protection  next,  we  find  auother  prohi- 
bition in  the  above  amendmenl:.  A thorough  study  of  this 
important  question  leaves  none  in  doubt  that  the  equality 
here  meant  is  equality  before  the  lavr,  not  in  politics; 
equalitT'  to  all  similarly  situated. 

See  Ton  Holst  Const.  Law,  247. 

The  question  of  equality  before  the  law  was  the  great 
question  between  the  Plebeians  and  Patricians  in  earjy 
Kome,  and  it  was  at  the  end  of  a constitutional  struggle 
of  150  years  that  the  Plebeians  gained  their  equality. 

See.Morey's  Outlines  of  Eoman  Law. 

Art.  Enc.  Britannica,  Tit.  Eonie. 

Wells,  Short  History  of  Eome. 


97 


Maine  says  that  the  fumlaiiiental  doctrine  tliat  all  men 
are  equal  is  one  of  a lar^e  number  of  lej^al  maxims  which 
Koman  Juris  Consulates  considered  strictly  a jiii'idical 
maxim;  and  it  was  founded  upon  sni)i)osed  law  natural. 

' Maine’s  Ancient  Law,  92. 

In  the  discussion  of  the  ‘^contract  theory'’  of  the  state, 
Grotius,  Milton,  Hobbes,  Locke,  Rousseau  and  all  other 
followers  of  that  school  began  with  one  idea — “that  in  a 
state  of  nature  all  men  are  equal.” 

See  Index  ^‘Contract  Theory”  to. 

Hooker’s  Ecclesiastical  Policy  (1591). 

Grot  is,  De  Jure  Belle  et  Pacis  (1G25) . 

Milton,  Tenure  of  Kings  & Magistrates  (1649). 

Hobbe’s  Leviathan,  Ch.  II  of  Part  III  (1651). 

Locke  on  Government  (1653). 

Rousseau’s  Contract  Soc. 

Willoughby,  Nature  of  State. 

Lowell's  Essays  on  Government. 

All  men  are  created  equal;  they  are  endowed  by  their 
Creator  with  certain  inalienable  rights,  and  among  those 
are  life,  liberty  and  the  pursuit  of  happiness. 

Declaration  of  Independence. 

Constitution  of  Nebraska. 

Constitution  of  New  Hampshire. 

Constitution  of  Vermont. 

Constitution  of  Virginia- — see  others. 

All  men,  when  they  form  a social  compact,  are  equal  in 
rights. 

Constitution  of  Connecticut. 

Constitution  of  Florida. 

Constitution  of  Oregon. 

Constitution  of  Texas. 


98 


All  freemen  when  tliev  form  a social  compact,  are  equal 
in  rights. 

Constitution  of  Alabama. 

Constitution  of  Arkansas. 

Constitution  of  Kansas. 

Constitution  of  ]\Iississippi. 

The  same  principle  is  recognized  in  those  foreign  states 
that  have  modern  constitutions,  all  of  which  have  been 
formed  after  our  own  system  and  some  of  them  patterned 
from  its  provisions. 

Constitution  uf  Switzerland. 

Constitution  of  Mexico. 

Constitution  of  Prussia. 

Constitution  of  Italy,  etc. 

^^All  Swiss  shall  be  equal  before  the  law.’’ 

Constitution  of  Switzerland,  Art.  4. 

No  person  shall  be  judged  by  special  law  or  special  tri- 
bunal. 

Constitution  of  Mexico. 

^^All  Prussians  shall  be  equal  before  the  law.-’ 

Constitution  of  Prussia,  Art.  4. 

“All  the  inhabitants  of  the  Kingdom,  Avhatever  their 
rank  or  title,  shall  enjoy  equality  before  the  law.  All  shall 
equally  enjoy  civil  and  political  rights.” 

Constitution  of  Italy,  Art.  24. 

The  laAV  should  be  the  same  for  all,  both  in  protecting 
and  punishing.  This  equalitA”  is  asserted  to  be  a self  evi- 
dent truth  Avhich  existed  independently  of  anA'  human  lav; 
and  before  it. 

Ritchie,  Natural  Rights,  Pages  244-5. 


99 


It  uUo  seems  to  he  the  (jeneral  ride  that  the  matter  of 
equal  protect  toil  of  the  laws  is  eon  si  rued  hy  the  Federal 
Court  as  it  is  hy  our  own  state  court,  to  permit  reasonahle 
classifications  if  all  within  the  class  are  treated  alike. 

Ill  Holden  V.  Hardy,  109  U.  S.  300,  L.  Ed.  780,  it  is  said: 

‘‘Tlie  14tli  Aiiieiidiiiont  does  not  profess  to  secure  to 
all  i)ersoiis  in  the  United  ^States  the  benefit  of  the  same 
laws  and  the  same  remedies.  Great  diversities  in  these 
respects  may  exist  in  two  states  separated  only  by  an 
imaginary  line.  On  one  side  of  this  line  tliere  may  he 
a riglit  of  trial  l)y  juiw,  and  on  the  other  no  sucli  riglit. 
Each  state  prescribes  its  own  modes  of  judicial  pi(i- 
ceeding.  If  diversities  of  laws  and  judicial  proceed- 
ings may  exist  in  the  several  states  without  violating 
the  equality  clause  in  the  14th  Amendment,  there  is  no 
solid  reason  why  tliere  may  not  be  such  diversities  in 
different  parts  of  the  same  state. 

^‘The  same  subject  was  also  elaborately  discussed  by 
Mr.  Justice  Matthews  in  delivering  the  opinion  of  tliis 
court  in  Hurtado  v.  California,  110  U.  S.  510,  530  (28: 
232,  237).  ^This  flexibility  and  capacity  for  gro^^i;b 
and  adaption  is  the  peculiar  boast  and  excellence  of 
tlie  common  law.  * * * xhe  Constitution  of  the 

United  States  was  ordained,  it  is  true,  by  descendants 
of  Englishmen,  who  inherited  the  traditions  of  Eng-' 
lish  law  and  history;  but  it  was  made  for  an  unde- 
fined and  expanding  future,  and  for  a people  gathered 
and  to  be  gathered  from  many  nations  and  of  many 
tongues.  And  while  we  take  just  pride  in  the  prin- 
ciples and  institutions  of  the  common  law,  we  are  not 
to  forget  that  in  lands  where  other  systems  of  juris- 
prudence prevail,  the  ideas  and  processes  of  civil  jus- 
tice are  also  not  unknown.  Due  process  of  law,  in 
spite  of  the  absolutism  of  continental  governments,  is 
not  alien  to  that  code  which  survived  the  Eoman  Em- 
pire as  the  foundation  of  modern  civilization  in  Eu- 
rope, and  which  has  given  us  that  fundamental  maxim 
of  distributive  justice — sunm  cuique  trihuere.  There 
is  nothing  in  Magna  Charta,  rightly  construed  as  a 
broad  charter  of  public  right  and  law,  which  ought  to 
exclude  the  best  ideas  of  all  systems  and  of  every 
age;  and  as  it  was  the  characteristic  principle  of  the 


100 


common  law  to  draw  its  inspiration  from  every  foun- 
tain of  justice,  we  are  not  to  assume  that  the  sources 
of  its  supply  have  been  exhausted.  On  the  contrary, 
we  should  expect  that  tlm  new  and  various  experience 
of  our  own  situation  and  system  will  mould  and  shape 
it  into  new  and  not  less  useful  forms.’  We  have  seen 
no  reason  to  doubt  the  soundness  of  these  views.*’ 
Holden  V.  Hardy,  169  U.  S.  366. 


Rea^^onaWe  Cla.^sifirntion  Proper. 

In  Atchison,  Topeka^  Si  Hanta  Fe  Rij.  Vo.  v.  Matthews, 
174  U.  S.  96  (L.  Ed.  909),  the  Suijreme  Court  held  that 
equal  protection  of  the  laws,  guaranteed  by  the  14th 
Amendment  of  the  Constitution,  doc^s  not  forbid  classifi- 
cation. The  fact  of  inequality  produced  by  cla.ssification 
does  not  determine  its  constitutionality. 

In  that  case  the  Kansas  statute  provided  that  in  an  ac-  - 
tion  against  a railroad  company  for  damages  by  fire  caused 
by  operating  the  railroad,  the  plaintiff  need  only  establish 
the  fact  that  the  fire  complained  of  vras  caused  by  operat- 
ing the  railroad  and  the  loss  and  his  damages,  and  that  such 
proof  should  be  prima  facie  evidence  of  negligence,  and  al- 
lowing the  plaintiff  a reasonable  attorney's  fee.  The  court 
held  that  that  was  not  invalid  as  denying  equal  protection 
of  the  law. 

Upon  this  the  court  said: 

^^The  equal  protection  of  the  laws  which  is  guaran- 
teed by  the  Fourteenth  Amendment  does  not  forbid 
classification.  That  has  been  asserted  in  the  strongest 
language.  Barhier  v.  Connolly,  113  U.  S.  27  (28  L. 
Ed.  823).  * * * 

^‘But  neither  the  amendment — broad  and  compre- 
hensive as  it  is — nor  any  other  amendment,  was  de- 
signed to  interfere  with  the  power  of  the  state,  some- 
times termed  its  police  power,  to  prescribe  regulation 
to  promote  the  health,  peace,  morals,  education,  and 
good  order  of  the  people,  and  to  legislate  so  as  to  in- 


101 


crease  the  iudustries  of  the  state,  develop  its  resources, 
and  add  to  its  wealth  and  prosperity.  From  the  very 
necessities  of  society,  lej^islation  of  a sjiecial  character, 
havin<>-  these  objects  in  view,  must  oftcm  l)e  had  in  cer- 
tain  districts,  sncli  as  for  drainin*^  marshes  and  irri- 
^atin^  arid  jilains.  Sju^cial  l)urd(*ns  arc*  often  m*ces- 
sary  fm*  ^(*neral  benelits — for  siijjplyin^i;  water,  j)re- 
ventiii”-  tires,  li‘»litin^-  districts,  cleaninj^  streets,  open- 
ing' parks,  and  many  otlier  objects.  Ke.i^nlations  for 
tliese  ])iirposes  may  ])i*ess  with  more  or  less  wei«;ht 
upon  one  tlian  iijxm  another,  but  they  are  desij^ned, 
not  to  ini])ose  une(pial  or  unnecessary  restrictions  uj)- 
011  anyone,  but  to  ])romote,  witli  as  little  inconvenience 
as  possible,  the  <>eneral  j^ood.  Though,  in  many  re- 
si)ects,  necessarily  s]i(*cial  in  their  character,  they  do 
not  furnish  just  j^round  of  complaint  if  they  operate 
alike  upon  all  ])ersons  and  prr)))erty  under  the  same 
circumstances  and  conditions.  Class  legislation,  dis- 
criminating against  soim*  and  favoring  others,  is  pro- 
hibited, but  legislation  which,  in  carrying  out  a jjublic 
purpose,  is  limited  in  its  application,  if  within  the 
sphere  of  its  operation  it  affects  alike  all  persons  simi- 
larly situated,  is  not  within  the  amendment.’^ 

And  again : 

^^It  is  the  essence  of  a classification  that  upon  the 
class  are  cast  duties  and  burdens  different  from  those 
resting  upon  the  general  public.  * * * Indeed, 

the  very  idea  of  classification  is  that  of  inequality  so 
that  it  goes  without  saying  that  the  fact  of  inequality 
in  no  manner  determines  the  matter  of  constitution 
ality.” 

Atchison.  Topeka  k Santo  Fe  Rij.  Co.  v.  Matthews^ 
174  U.  S.  96  (L.  Ed.  909-915). 

So  here  the  responsibilities  may  press  more  heavily  upon 
one  than  another,  but  this  design  will  be  equality. 

In  MaUet  v..  North  Carolina,  181  U.  S.  589  (L.  Ed.  1015), 
the  court  had  under  consideration  a law  of  Xorth  Caroli- 
na providing  that  the  state  in  a criminal  case  might  have 
the  allowance  of  an  appeal  from  one  district  and  not  from 


102 


another  was  not  a denial  of  the  equal  protection  of  the 
laws,  guaranteed  by  the  Fourteenth  Amendment,  saying: 

‘^In  Missouri  v.  Leicis,  101  U.  S.  23,  siih  nom^  Bow- 
man V.  LewiSj  25  L.  Ed.  989,  it  was  held  that,  by  the 
14th  amendment  of  the  Constitution  of  the  United 
States,  a state  is  not  prohibited  from  prescribing  the 
jurisdiction  of  the  several  courts,  either  as  to  tlieir 
territorial  limits,  or  the  subject-matter,  amount,  or 
finality  of  their  respective  judgments  or  decrees.  * * * 
^^Eacli  state  has  tlie  riglit  to  make  political  subdivis- 
ions of  its  territory  for  municipal  purposes,  and  to  reg- 
ulate tlieir  local  government.  As  respects  tlie  admin- 
istration of  justice,  it  may  establish  one  system  of 
courts  for  cities  and  another  for  rural  districts,  one 
system  for  one  portion  of  its  territory  and  another  sys- 
tem for  another  portion.” 

Mallet  V.  North  Carolina,  181  U.  S.  589  (L.  Ed. 

1015-20). 


yaliditii  of  Mining  Inspection  Law. 

In  Consolidated  Coal  Co.  v.  Illinois,  185  U.  S.  203,  L.  Ed. 
872,  the  court  had  under  consideration  an  act  of  1897  in  the 
state  of  Illinois,  with  respect  to  coal  mines,  which  act  ex- 
empted all  mines  from  the  operation  of  the  act  if  they  did 
not  have  to  exceed  five  employees;  it  also  confided  to  the 
inspectors  some  discretion  as  to  the  number  of  times  that 
each  mine  should  be  inspected,  and  to  regulate  the  charges 
therefor  to  be  made  by  the  mine  owner. 

It  was  held  that  the  act  was  not  repugnant  to  the  Four- 
teenth Amendment,  the  court  saying  at  page  875 : 

“The  regulation  of  mines  and  miners,  their  hours 
of  labor,  and  the  precautions  that  shall  be  taken  to  in- 
sure their  safety,  health,  and  comfort,  are  so  obviously 
within  the  police  power  of  the  several  states  that  no 
citalion  of  authorities  is  necessary  to  vindicate  the 
general  principle.  * * * It  is  true  that  the  act  of 

1897  amended  the  former  law  of  1895,  by  limiting  its 
application  to  coal  mines,  ‘where  more  than  five  men 


103 


are  employed  at  any  one  linn*/  Tliis  is  a sp(*ci(*s  of 
classilical ion  wliicli  the  l(*;»islatnr(‘  is  at  lilua-ty  to 
adopt,  ])rovided  it  be  not  wholly  arbitrary  or  nni-eason- 
able.  * * * 111  the  case  under  consideral inn  there 

is  no  atteni])t  arbitrarily  to  select  one  mine  foi*  inspec- 
tion, but  only  to  assume  tliat  mines  which  are  worked 
upon  so  small  a scale  as  to  i-ecjuire  only  five  o])eratives 
would  not  be  likel^^  to  need  the  careful  insjiection  jiro- 
vided  for  the  lar<>er  mines,  where  tlie  workings  were 
carried  on  upon  a larii^er  scale  or  at  a <^reater  depth 
from  the  surface,  and  wlierea  much  lar'i^er  fnrc("  would 
be  necessary  for  their  successful  o])eration.  It  is  quite 
evident  that  a mine  which  is  o]>erated  by  only  five  men 
could  scarcely  have  passed  the  experimental  stage,  or 
that  ])recautions  necessary  in  the  ojieration  of  coal 
mines  of  ordinary  magnitude  would  be  required  in 
such  cases.  There  was  clearly  reasonable  foundation 
for  a discrimination  here.’’ 


Again  on  page  SIT : 

^Tn  enacting  a law  with  regard  to  the  inspection 
of  mines,  we  see  no  objection,  in  case  the  legislature 
find  it  impracticable  to  classify  the  mines  for  the  pur- 
poses of  inspection,  to  commit  that  power  to  a body 
of  experts  who  are  not  onlv  experienced  in  the  opera- 
tion of  mines,  but  are  acquainted  with  the  details  nec- 
essary to  be  known  to  make  a reasonable  classification, 
although  it  may  affect  the  amount  of  fees  to  be  paid 
by  the  mine  owners.” 

Con  soli  da  ted  Coal  Co.  et  al,  v.  Illinois,  185  U.  S. 

203,  L.  Ed.  873. 

This  is  a binding  precedent  for  reasonable  classification 
and  inspection. 


State  Police  Poicer  Allows  Classification  on  Reasonable 

Basis. 

But,  of  course,  as  all  other  states,  Minnesota  has  a po- 
lice power,  and  it  applies  to  the  question  of  employer  and 
employe  in  dangerous  employments. 


104 


Our  court  lias  held  valid  a law  requiring  Street  Itaih 
ways  to  make  enclosure  to  secure  motormen  from  weather 
exposures.  In  Htate  v.  Dow  IS.  ISmith,  58  Minn.  35,  in  de- 
ciding this  question  our  court  said : 

‘^Any  one  acquainted  with  the  extreme  cold  of  much 
of  the  weather  in  this  climate  between  the  1st  of  No- 
vember and  the  1st  of  April,  and  who  knows,  as  every- 
body does, -that  the  motornian  on  an  electric  car  is 
obliged  to  stand  in  one  place,  always  on  the  alert, 
his  whole  attention  given  to  the  means  of  controlling 
the  motive  power  and  the  brake,  and  to  looking  out 
ahead,  and  unable,  with  due  regard  to  his  duties,  to 
give  attention  to  protecting  himself  from  the  cold, 
must  appreciate  that,  when  going  at  the  rate  of  eight 
or  nine  miles  an  hour,  perhaps  against  a head  wind, 
and  with  the  mercury  below  zero,  the  position  of  the 
motorman  is  one  not  merely  of  discomfort,  but  of  ac- 
tual danger  to  health,  and  sometimes  to  life,  and  the 
tendency  of  which  is  to  disable  him  to  some  extent 
to  perform  his  duties  in  the  way  that  care  to  safety  of 
his  passengers  and  of  travelers  on  the  street  requii^s. 

‘‘It  has  never  been  questioned  that  the  police  i)ower 
of  the  state  extends  to  regulating  the  use  of  dangerous 
machinery,  with  a view  to  protecting,  not  only  others, 
but  tliose  who  are  employed  to  use  it;  and  if  it  be 
conceded,  as  it  must  be,  that  the  state  may  intervene 
by  regulations  in  such  a case,  we  do  not  see  why  it  may 
not  in  such  a case  as  this. 

“The  act  is  within  the  police  power. 

“When  a subject  is  within  that  power,  the  extent 
to  which  it  shall  be  exercised,  and  the  regulations  to 
effect  the  desired  end,  are  generally  wholly  in  the  dis- 
cretion of  the  legislature.  The  legislature  might  in 
this  case  have  required  the  use  of  the  prescribed  en- 
closure only  at  such  times  when  the  cold  reached  a 
certain  degree,  or  when  storms  prevailed,  but  it  was 
thought  fit  to  make  sure  of  the  result  aimed  at  by  cov- 
ering the  time  of  year  when  extreme  cold  and  bitter 
storms  may  occur  at  any  time;  and  that  was  within  its 
exclusive  province. 

“The  objection  that  this  is  class  legislation  is  based 
on  the  fact  that  the  act  is  confined  to  street  cars  pro- 
pelled by  cable,  steam,  or  electricity,  and  does  not  in- 


105 


elude  street  cars  drawu  by  mules  aud  horses,  (Ji*  car- 
riages or  wagons;  and  it  is  assumed  that  here  is  an 
attempt  at  purely  arbitrary  classilication  for  the  pur- 
pose of  the  act. 

‘‘The  evil  sought  to  be  remedied  does  iK;t  exist  in 
case  of  the  slowly-g»)ing  mule  or  liorse  car,  or  carriage 
• or  wagon,  to  the  same  degree  as  in  the  case  of  cable, 
electric,  or  steam  cars. 

“Itiit,  where  ar.  evil  exists  in  a variety  of  cases,  it 
is  a sullicient  ground  for  classification  in  legislating, 
so  as  to  include  some  and  exclude  others,  that  in  the 
former  the  evil  can  be  remedied,  while  in  the  latter  it 
cannot  b^^, 

‘‘The  man  in  control  of  the  cable,  electric,  or  steam 
railway  car  may  be  boxed  in  without  impairing  his 
power  of  control  in  the  slightest  degree;  but  to  box  in 
the  driver  of  a horse  or  mule  car,  or  of  a stage-coach 
or  carriage  or  wagon,  separating  him  from  his  ani- 
mals, Avhile  of  course,  it  could  be  done,  would  bring 
about  greater  evils  than  those  sought  to  be  remedied. 
The  difference  in  this  respect  between  cars  included  in 
this  act  and  those  not  included  is,  such  as,  to  justify 
difference  in  legislating.” 

This  power  has  likewise  been  extended  to  protect  fish  and 
animals.  State  v.  Mrozinsl'i,  59  Minn.  465;  State  v.  Roe- 
man,  58  Minn.  393;  State  v.  Tower  Lumber  Co.,  100  Minn. 
38,  and  to  the  regulation  of  foods.  State  v.  E organ,  55 
Minn.  183,  and  oil  inspection,  ^ViJUs  v.  Standard  Oil  Co., 
50  Minn.  290;  State  ex  rel  Citij  of  Euinea polls  v.  Great 
'Northern  Rail  wag,  98  Minn.  380-389,  State  ex  rel  City  of 
Duluth  V.  Northern  Pacific  Railway  Company,  98  Minn. 
429-432. 

The  opinions  in  the  railway  cases  above  mentioned  clear- 
ly show  that  the  general  police  powers  are  exercised  under 
the  state  system. 

In  Dobbins  v.  Los  Angeles.  195  U.  S.  223  (169),  the  court 
again,  speaking  of  these  various  matters,  with  respect  to 
municipal  legislation,  requotes  from  Holden  r.  Hardy,  to 


106 


show  that  it  is  simply  a question  of  whether  the  statute  has 
been  adopted  in  the  exercise  of  a reasonable  discretion,  or 
whether  the  action  is  a mere  excuse  for  an  unjust  discrimi- 
nation or  the  oppression  or  spoliation  of  a particular  class, 
saying: 

^The  state  has  undoubtedly  the  power,  by  appropri- 
ate legislation,  to  protect  the  public  morals,  the  pub- 
lic health,  and  the  public  safety;  but  if,  by  their  neces- 
sary operation,  its  regulations  looking  to  either  of 
those  ends  amount  to  a denial  to  persons  within  its 
jurisdiction  of  the  equal  protection  of  the  laws  they 
must  be  deemed  unconstitutional  and  void.” 

Dohhins  v.  Los  Angeles,  195  IT.  S.  223  (L.  Ed.  169- 
175) . 

Tliis  means  all  within  the  same  conditions  and  classes. 

It  may  be  taken  then  as  tlie  settled  law  of  the  Supreme 
Court,  and,  we  think,  equally  so  of  the  states,  that  a law 
necessary  as  a police  regulation  to  protect  emploj^es^  may 
be  based  on  classification  of  the  dangers  of  the  employ- 
ment, if  the  classifications’  are  based  upon  reasonable  and 
not  arbitrary  grounds,  and  apply  equally  to  all  of  the 
same  class  similarly  situated.  There  is  no  difficulty  about 
complying  with  this  principle. 

c. 

> Due  Proeess  of  Law. 

The  due  process  of  law  provided  by  the  Fifth  Amendment 
applies,  of  course,  to  the  Federal  government,  but  as  con- 
tained in  the  14th  Amendment  it  is  a prohibition  upon  the 
states.  This  is  a matter  then  that  must  be  understood. 

The  Constitution  of  Minnesota  provides : ^^Every  person 
is  entitled  to  a ^certain  remedy  in  the  laws  for  all  injuries 
or  wrongs  which  he  may  receive  in  his  person,  property  or 


107 


diameter”  (Const.  Art.  I,  See.  8).  ^Ve  must  not  overlook 
the  faet  that  this,  too,  is  one  of  several  eonstitutional  pro- 
visions the  intention  of  whieli  was  to  seeni-e  eaeli  jierson 
witliin  the  state  from  injuries  inllieted  by  otliers,  and  to 
grant  liiin  redress  in  ease  of  sneli  injuries.  In  sliort,  the 
liability  is  enaeted  for  a prevention,  the  ndress  is  given 
for  eompensation.  We  must  alike  remember  tluit  tliis  is  the 
only  provision,  aside  from  the  general  selieme  of  govern- 
ment, whieh  expressly  seeures,  by  sj)eeifie  enaetment,  per- 
son, property,  or  eharaeter  througli  remedial  laws.  It 
is  the  outgrowtli  of  many  centuries,  it  liad  a well  defined 
meaning  atthe  time  of  the  adoption  of  this  constitution;  it 
meant  to  ^Ssecure” — not  ^-^grant*' — redress  for  injuries,  as 
the  law  then  viewed  them,  and  into  that  law  we  must  look 
for  its  interpretation. 

Von  Holst.  Const.  Laic,  288-9. 

Submit  the  question  to  history  and  we  see  the  truth. 
Under  the  Eoman  Law  there  were  three  legal  maxims;  ^‘to 
live  honestly,  to  hurt  no  one,  to  give  every  one  his  due.” 
Sandars  Justinian  (Hammond),  L.  I.,  Title  I.,  Parag. 

3,  p.  68. 

Among  the  delicts  was  what  Komans  called  injuria. 
When  specifically  used  this  term  had  reference  to  an  in- 
jury done  to  the  person  or  reputation,  as  in  the  case  of  an 
assault  or  slander.  The  Praetorian  law  softened  the  rigor 
of  the  XII  Tables,  and  allowed  the  injured  person  to  re- 
cover such  compensation  as  the  nature  of  the  case  required. 
The  injured  party  could  bring  either  a civil  or  criminal  ac- 
tion against  the  offender,  and  not  only  was  the  perpetrator 
of  the  injury  liable,  but  any  person  who  counselled  him  was 
also  liable,  and  the  damages  might  be  aggrevated  by  pecu- 
liar circumstances. 

M cKenme  ihed,  261-2. 


108 


In  England  a portion  of  Magna  Charta  was: 

‘‘No  freeman  shall  be  taken  or  imprisoned,  or  dis- 
seized or  out-lawed  or  banished,  or  aiwways  destroyed, 
nor  will  we  pass  upon  him,  nor  will  we  send  upon 
him,  unless  by  the  lawful  judgment  of  his  peers  or  by 
the  law  of  the  land.  We  will  sell  to  no  man,  we  will 
not  deny  to  any  man,  eitlier  justice  or  right.” 

Hurd  Habeas  Corpus,  65-73. 

Spooner,  in  his  essays  on  trial,  makes  an  historical  and 
critical  examination  of  the  chapter  and  says  that  its  legal 
import  is : 

“No  freeman  shall  be  arrested,  or  imprisoned,  or  de- 
prived of  liis  freehold,  or  his  liberties,  or  free  customs. 
or.be  outlawed,  or  exiled,  or  in  any  manner  destroyed 
(harmed),  nor  will  we  (the  king)  proceed  against  him, 
nor  send  any  one  against  him,  by  force  or  arms,  un- 
less according  to  (that  is  in  execution  of)  the  sen- 
tence of  his  peers,  and  (or  ‘or’  as  the  case  may  re- 
quire) the  common  law  of  England  (as  it  was  at  the 
time  of  Magna  Charta,  in  1215).” 

Hurd  on  Habeas  Corpus,  73. 

Spooner’s  Trial  bg  Jurg,  49. 

\ 

In  1660,  Pufendorf  said : 

“In  the  series  of  absolute  duties,  or  such  as  obliged 
men  antecedently  to  any  Unman  Institution,  this 
seems  with  justice  to  challenge  the  first  and  noblest 
place.  THAT  NO  MAN  IIUKT  ANOTHEK,  AND 
THAT  IN  CASE  OF  ANY  HURT  OR  DA:\1AGE 
DONE  BY  HIM,  HE  FAIL  NOT  TO  MAKE  REPAR- 
ATION.” 

Pufendorf,  Laic  of  Nature  & Nations,  Bk.  Ill, 
Ch.  1. 

After  specifying  that  the  “judicial  power  of  the  United 
States  shall  be  vested  in  one  Supreme  Court,”  etc.,  the  Con- 
stitution of  the  United  States  proceeds  to  say:  “The  judi- 
cial poAver  shall  extend  to  all  cases  in  law  and  equity,  aris- 
ing under  this  constitution,  the  laws  of  the  United  States, 


109 


and  treaties  made,  or  which  sliall  be  made,  under  this  au- 
thorit}^,”  etc. 

Const,  of  U.  aS'.,  Art.  Ill,  Sec.  1 and  2. 

The  Ordinance  of  1787  provided  that  tlie  inhabitants  of 
the  Northwest  Territory  should  be  entitled  to  ^‘judicial  pro- 
ceedings according  to  tlie  course  of  the  common  law.’’ 

See  Ordinance  of  1787,  Art.  II. 

The  various  sections  of  Art.  I,  of  the  Constitution  of  Wis- 
consin, during  the  time  it  included  Minnesota,  secured  the' 
equality  of  citizens,  liberty  of  the  press,  right  of  redress 
through  the  courts  for  injuries  or  wrongs  committed.  The 
Organic  'Act  of  Minnesota  provided  that  the  inhabitants 
should  be  possessed  of  the  same  rights  as  they  were  given 
under  the  Laws  of  Wisconsin  at  that  time;  the  schedule  of 
the  Minnesota  Constitution  provided  for  a continuance  of 
those  rights  during  the  period  of  transformation;  the  Con- 
stitution of  Minnesota  included  the  same  provisions;  they 
are  the  fundamental  law  of  the  state,  today. 

The  constitutions  of  almost  all  the  states  have  provis- 
ion for  remedies  of  the  law  and  whether  they  say  ^dn  laws,^’ 
^^according  to  law  of  land,’’  “due  course  of  law,”  “all  courts 
shall  be  open,  and  every  man  for  an  injury  done  him  in 
his  lands,  goods,  person  or  reputation,  shall  have  remedy 
by  due  course  of  law,”  it  matters  not ; they  mean  the  same. 
They  are  collected  in  Hough’s  American  Constitutions y 
Vol.  II. 

But  the  Federal  Constitution  does  not  control  mere 
forms  of  procedure  in  or  regulate  the  practice  of  state 
courts. 

In  Maxwell  v.  Dow,  176  U.  S.  581  (L.  Ed.  597),  it  is 
said : 


0^ 


110 


state  cannot  deprive  a person  of  liis  property 
without  due  process  of  law,  but  this  does  not  neces- 
sarily , imply  that  all  trials  in  the  state  courts,  atfect- 
ing  the  property  of  persons,  must  be  by  jury.  This  re- 
quirement of  the  constitution  is  met  if  the  trial  is  had 
according  to  the  settled  course  of  judicial  proceed- 
ings. * * * 

‘‘Due  process  of  law  is  process  due  according  to  the 
law  of  the  land.  This  process  in  the  states  is  regu- 
lated by  the  law  of  the  states.  Our  power  over  that 
law  is  only  to  determine  whether  it  is  in  conflict  with 
the  suj)reme  law  of  the  land— tliat  is  to  say,  witli  the 
constitution  and  laws  of  the  United  States  made  in 
pursuance  thereof — or  with  any  treaty  made  under 
the  authority  of  the  United  States.’’ 

Maxicell  v.  Dow,  170  U.  S.  581  (L.  Ed.  597). 

It  is  thus  sure  that  due  process  may  be  had  according 
to  the  regular  state  practice  without  a jury  trial. 

In  a recent  case,  in  streaking  of  procedure,  the  court 
said : 

“It  does  not  follow,  however,  that  a procedure  set- 
tled in  English  law  at  the  time  of  the  emigTation,  and 
brought  to  this  country  and  practiced  by  our  ances- 
tors, is  an  essential  element  of  due  process  or  la\. 
If  that  were  so,  the  procedure  of  the  first  half  of  the 
17th  century  would  be  fastened  upon  the  American 
jurisprudence  like  a straight  jacket,  only  to  be  un- 
loosed by  constitutional  amendment.” 

Ticining  v.  New  Jersey,  211  U.  S.  78. 

And: 

“‘That  (said  Mr.  Justice  Matthews,  in  the  same 
case,  p.  529)  would  be  to’ deny  every  quality  of  the  law 
but  its  age  and  to  render  it  incapable  of  progness  or 
improvement.’  ” 

Ticininy  v.  New  Jersey,  211  U.  S.  78. 

It  then  proceeds  to  call  attention  to  the  fact  that  among 
the  notable  decisions  are  those  denying  jury  trial,  both  in 
criminal  and  civil  cases,  and  then  says : 


Ill 


'^The  cases  proceed  upon  tlie  tlieory  tliat,  a 

court  of  justice  whicli  lias  jurisdiction  and  acts  not  ar- 
bitrarily but  in  conformity  with  tlie  general  law  ujion 
evidence  and  after  inquiry  made,  vitli  notice  to  the 
parties  affected  and  opportunity  to  be  heard,  tlien  all 
the  requirements  of  due  process  of  law,  so  far  as  it  re- 
lates to  procedure  in  court  and  metliods  of  trial  and 
character  and  effect  of  evidence,  are  complied  with.” 

The  opinion  then  cites  the  case  oi  Joica  Central  r.  Iowa, 
160  U.  S.  393,  which  says : 

^^But  it  is  clear  that  the  14th  amendment  in  no  way 
undertakes  to  control  the  power  of  tlie  state  to  deter- 
mine by  what  process  le£?al  ri«;lits  may  be  asserted  or 
legal  obligations  enforced,  provided  the  metbod  of 
procedure  adopted  gives  reasonable  notice  and  affords 
fair  opportunity  to  be  heard  before  the  issues  are  de- 
cided.” 


The  opinion  then  re-quotes  from  Louisville  & Nashville 
R.  R.  Co.  V.  Schmidt,  177  U.  S.  230,  L.  Ed. : 

, ^Tt  is  no  longer  open  to  contention  that  the  due  pro- 
cess of  law  clause  of  the  14th  Amendment  to  the  Con- 
stitution of  the  United  States  does  not  control  mere 
forms  of  procedure  in  state  courts,  or  regulate  practice 
therein.” 

Twining  v.  N.  J..  211  U.  S.  78  (L.  Ed.  97). 

Further  on  in  the  opinion  it  said: 

^^Due  process  requires  that  the  court  which  assumes 
to  determine  the  rights  of  the  parties  shall  have  juris- 
diction and  that  there  shall  be  notice  and  opportunity 
for  hearing  given  the  parties.  * * * Subject  to 

these  two  fundamental  conditions,  which  seem  to  be 
universally  prescribed  in  all  systems  of  law  estab- 
lished by  civilized  countries,  this  court  has  up  to  this 
time  sustained  all  state  laws,  statutory  or  judicially 
declared,  regulating  procedure,  evidence  and  methods 
of  trial,  and  held  them  to  be  consistent  with  due  pro- 
cess of  law.” 


112 


The  court  proceeds  to  folloAV  that  view  Avith  a holding 
that  there  must  be  sufficient  caution  to  guard  liim  against 
the  arbitrary  action  of  government. 

It  makes  quotations  from  its  OAvn  opinions  in  the  past 
to  the  same  effect. 

The  effect  then  of  tliis  portion  of  this  amendment  is  to 
deny  to  the  state  the  right  of  taking  aAva}'  tlie  citizens- 
property  Avithout  due  process  of  law  and  it  must  give  the 
party  reasonable  notice  and  a fair  hearing  before  decision. 
This,  lioAveA^er,  relates  to  process  or  procedure  onh^,  as  the 
words  Avould  indicate;  not  to  the  right  to  take  property  if 
a constitutional  laAv  so  provides  upon  complying  Avith  such 
process.  The  state’s  procedure  is  for  the  states  so  long  as 
their  acts  are  not  arbitrary. 

There  must  be  some  time  and  place  and  a court  to  ad- 
judicate the  laAV  of  liability"  if  desired. 


e. 


Fault  not  Xcccssarihj  the  Basis  of  LiahiUtij  Here. 

In  Freund's  Police  Power,  Section  G31,  the  author  says: 

^^If  the  rule  of  absolute  liabilitA"  is  held  to  be  un- 
constitutional, it  must  be  on  the  ground  that  justice 
and  equality  forbid  that  a person  be  required  to  niake 
good  the  loss  oi  another,  unless  some  fault  or  culpa- 
bility can  be  imputed  to  him.  This  is  the  position 
taken  by  the  courts  of  Alabama,  Montana,  WAmniing 
and  Utah.  But  Avhile  the  common  laAV  does  require 
fault  of  some  kind  as  a general  principle,  it  has  ahvays 
recognized  some  exceptions  (trespass  of  cattle,  fire, 
etc.)  and  it  cannot  be  said  that  the  rules  of  the  com- 
unon  laAv  represent  the  only  and  final  conclusions  of 
justice.  The  principle  that  inevitable  loss  should  be 
borne  not  by  the  person  on  whom  it  may  happen  to 
fall,  but  by  the  person  Avho  profits  by  the  dangerous 
business  to  Avliicliffhe  loss  is  incident,  embodies  a A^ery 


113 


intelligible  idea  of  justice,  and  wliicli  seenis  to  lie  in 
accord  with  modern  social  sentiment.  Moreover,  the 
rule  of  absolute  liability  is  established  in  our  law  in  the 
case  of  fires  caused  by  locomotives  and  has  been  sanc- 
tioned by  the  United  States  Supreme  Court  ( Kio  U. 
S.  180).  It  also  underlies  the  rule  of  respondeat  su- 
perior ^ since  the  employer  cannot  relieve  himself  for 
liability  for  acts  done  by  the  servant  within  the  scope 
of  his  employment,  by  proof  of  the  greatest  possible 
care  in  the  selection  of  the  servant.  Logic  and  con- 
sistency, therefore,  demand  that  liability  iri'cs]H‘ctive 
of  negligence  should  not  be  denounced  as  unconstitu- 
tional. The  required  element  of  causation  mav  read- 
ily be  found  in  the  voluntarv  employment  of  danger- 
ous instruments  or  agencies.” 

The  case  of  Chicago  Roclc  Island  & Pacific  Railway  Com- 
pany V.  Zernecke,  183  U.  S.  582,  L.  Ed.  339,  was  an  action 
brought  by  the  administratrix  of  the  estate  of  Zernecke, 
deceased,  to  recover  damages,  under  a statute  of  the  State 
of  Nebraska,  for  the  death  of  Zernecke,  caused  by  the  de- 
railment of  the  train  of  defendant  upon  which  Zernecke 
was  a passenger. 

The  statute  in  question  provided  as  follows : 

^^Every  railroad  company,  as  aforesaid,  shall  be  lia- 
ble for  all  damages  inflicted  upon  the  person  of  pas- 
sengers, while  being  transported  over  its  road,  except 
in  cases  where  the  injury  done  arises  from  the  crim- 
inal negligence  of  the  person  injured,  or  when  the  in- 
jury complained  of  shall  be  the  violation  of  some  ex- 
press rule  or  regulation  of  said  road  actually  brought 
to  his  or  her  notice.”  Neb.  Comp.  Laws,  838. 

The  defendant  in  its  answer  denied  the  plaintiff’s  alle- 
gation of  negligence,  and  alleged  that  the  derailment  was 
caused  by  some  person  unknown  to  the  company,  and  not 
in  its  employment  or  under  its  control  who  wilfully,  mali- 
ciously and  feloniously  removed  and  displaced  from  the 
track  certain  spikes,  nuts,  angle-bars,  etc.,  and  otherwise 


114 


tore  up  and  destroyed  the  track.  The  defendant  upon  the 
trial  offered  witnesses  to  sustain  the  allegations  of  its  an- 
swer. This  testimony  upon  objection  by  the  plaintiff  was 
rejected. 

In  this  case  the  court  said : 

^^The  specific  contention  is  that  tlie  company  is  de- 
prived of  its  defense,  and  not  only  declared  guilty  of 
negligence  and  wrong  doing  without  a hearing,  but 
adjudged  to  suffer  without  wrong  doing,  indeed  even 
for  the  crimes  of  others,  which  the  company  could  not 
have  forseen  or  have  prevented. 

^‘Tlms  described  the  statute  seems  objectionable. 
Regarded  as  extending  the  rule  of  liability  for  injury 
to  persons  which  the  common  law  makes  for  the  loss 
of  or  injiiry  to  things,  the  statute  seems  defensible. 
And  it  was  upon  this  ground  that  the  supreme  court 
of  the  state  defended  and  vindicated  the  statute.  The 
court  said,  ^The  legislation  is  justifiable  under  the  po- 
lice power  of  the  state,  m it  has  been  held.  It  was 
enacted  to  make  railroad  companies  insurers  of  the 
safe  transportation  of  their  passengers,  as  they  were 
of  baggage  and  freight;  and  no  good  reason  is  sug- 
gested why  a railroad  company  should  be  released 
' from  liability  for  injuries  received  by  a passenger 
Avhile  being  transported  over  its  line,  while  the  corpor- 
ation must  respond  for  any  damages  to  his  baggage  or 

■ freight.’ 

^H3ur  jurisprudence  affords  examples  of  legal  liabil- 
ity without  fault,  and  the  deprivation  of  property 
without  fault  being  attributable  to  its  0T\Tier.  The 
law  of  deodands  was  such  an  example.  ' The  personifi- 
cation of  the  ship  in  admiralty  law  is  another.  Oth- 
er examples  are  afforded  in  the  liability  of  the  hus- 
band for  the  torts  of  the  wife — the  liability  of  a mas- 
ter for  the  acts  of  his  servants.'” 

This  case  has  been  followed  in  Chicago , R.  I.  & P.  v. 
Eaton,  183  U.  S.  589,  and  in  Chicago,  Burlington  & Quincy 
R.  R.  v.^  Wolfe,  187  U.  S.  638. 

Judged  by  the  question  of  actual  fault,  such  law  could 
hardly  find  favor;  but  judged  as  a system  of  general  lia- 


iir> 


bility  beccanse  of  general  comliiet  of  business  nec(\'<sai'ily 
causing  specific  cases  wliicli  cannot  be  s])ecifically  antici- 
pated, the  law  seems  to  liav(^  s])lendid  i)recedent  in  tlie  au- 
thorities just  cited.  IndeiMl,  there  is  conduct  wliidi  so 
far  as  the  state  is  concerned  is  hazardous  to  life  and  limb; 
the  pursuit  of  the  conduct  is  dangerous  ti)  society  and  sjie- 
cific  individuals;  if  the  state  does  not  ]>rohibit,  it  must  reg- 
ulate; if  regulation  does  not  do,  then  compensation  is  next 
best. 


i nil  c sot  a Constitution. 

The  bill  of  rights  is  similar  in  the  ditferent  states,  gener- 
ally speaking. 

It  is  provided  by  Section  7 of  Article  1 of  the  Constitu- 
tion of  Minnesota  that  no  person  shall  be 

^‘Deprived  of  life,  liberty  or  property  without  due 
process  of  law.’’ 


Due  Process  of  Law  in  the  States. 

In  State  v.  Billings,  55  Minn.  467,  the  court  said: 

‘‘The  first  inquiry  is  as  to  what  is  ‘due  process  of 
law.’  In  Bardwell  v.  Collins,  44  Minn.  97,  (46  X.  W. 
315),  it  was  said  that  no  complete  or  exhaustive  defi- 
nition of  the  term  had  ever  been  attempted  by  the 
courts,  because  it  was  incapable  of  nnj  such  definition. 
All  that  could  be  done  was  to  lay  down  certain  general 
principles,  and  apply  them  to  the  facts  of  each  case  as 
they  arise.  Mr.  Webster’s  exposition  of  the  words, 
‘law  of  the  land,’  and  ‘due  process  of  law,’  viz:  ‘The 
general  law,  a law  which  hears  before  it  condemns; 
which  proceeds  upon  inquiry,  and  renders  judgment 
only  after  trial.  * * * But  it  may  be  stated  gen- 

erally that  due  process  of  law  requires  that  a party 
shall  be  properly  brought  into  court,  and  that  he  shall 
have  an  opportunity,  when  there,  to  prove  any  fact 


116 


which,  according  to  tlie  constitution  and  the  usages 
of  the  common  law,  would  be  a protection  to  him  or 
to  his  property.  People  v.  Board  of  Bapervisors,  TO  N. 
Y.  228.  Due  process  of  law  requires  an  orderly"  i)ro- 
ceeding  adopted  to  the  nature  of  the  case,  in  which 
the  citizen  has  an  opportunity  to  be  heard,  and  to  de- 
fend, enforce,  and  protect  his  rights.  A liearing,  or  an 
opportunity  to  be  heard,  is  absolutely  essential.” 

In  the  case  of  8tate  ex  rel  Barher  Asphalt  Paring 
Company  v.  District  Court  of  St.  Louis  County,  90 
Minn.  457,  the  conditions  were  peculiar.  The  company 
had^bcc/i  awarded  a contract  for  paving^  a portion  of 
a street  in  Dulutli.  Tlie  contract  provided  for  percentage 
pa^mients  as  tlie  work  progressed.  The  work  progressed 
until  practically  finished;  the  company  made  request  of  the 
board  of  public  Avorks  to  make  ah  estimate,  Avhich  it  did. 
It  certified  the  estimate  and  the  council  passed  a resolu- 
tion ordering  the  payment  and  directing  a draft  to  be 
drawn  on  the  city  treasurer.  The  company  asked  the  city 
clerk  to  give  an  order  on  the  treasurer  and  he  refused. 

Duluth  had  a charter  provision  allowing  appeals  to  be 
taken  to  the  court  in  such  cases  by  the  tax  payers. 

The  respective  quotations  will  shoAv  the  vieAvs  taken  b}* 
the  court,  90  Minn.  461-4 : 

^AYe  haA^e  no  doubt  that  the  provision  of  the  char- 
ter requiring  the  presentation  of  all  claims  to  the  city 
council  for  adjustment  and  alloAAmnce  Avas  an  appro- 
priate subject  for  charter  supervision,  and  from  that 
it  would  seem  to  follow  logically  that  it  was  also  prop- 
er to  continue  the  subject,  and  provide  the  manner  in 
which  the  determination  of  the  city  council  alloAving 
or  disallowing  a claim  might  be  removed  to  the  dis- 
trict court  for  judicial  inA’-esti oration  and  determina- 
tion; and  we  hold  without  further  remark  that  it  was 
AAuthin  the  power  of  the  framers  to  embody  in  the  char- 
ter the  provisions  under  consideration. 


117 


is  conteuded  that  the  provisious  of  the  diarter 
are  invalid,  because  they  do  not  constitute  due  process 
of  law.  The  charter  provision  was  taken  almost  whol- 
ly from  G.  S.  1894,  044,  providing  for  similar  appeals 
from  the  board  of  county  commissioners,  whicli  has 
been  in  force  in  this  state  for  forty  years  or  more,  and 
tlie  validity  of  which  has  never  been  (jnestioiied,  so  fai 
as  our  information  extends.  On  the  contrary,  the  stat- 
ute has  been  resorted  to  on  numerous  occasions,  both 
by  persons  having  claims  against  counties  and  by  the 
county  attorney  at  the  instance  of  taxpayers.  Thom- 
as V.  County  Commrs.  i^cott  Co.,  15  Minn.  254  (324)  ; 
Kroshus  V.  County  of  Houston,  40  .Minn.  102,  48  N. 
W.  770;  Davis  v.  County  of  Lc  Sucu?',  37  Minn.  491, 
35  N.  W.  304.  The  statute  is  a very  servicabte  one, 
and  provides  an  orderly  metliod  of  settling  claims  and 
demands  against  counties  without  the  necessity  of  the 
formal  commencement  of  an  action  in  court,  and  the 
provision  allowing  the  appeal  at  tlie  instance  of  tax- 
payers was  intended  as  a safeguard;  and  to  assist  in 
the  protection  of  the  i)ublic  funds.  Claims  against 
such  bodies  must  be  presented  to  their  administrative 
officers,  and  by  them  passcnl  upon,  from  whose  decis- 
ion an  appeal  to  the  district  court  is  provided,  where, 
without  formality  of  procedure,  the  matter  is  brought 
to  trial  and  speedy  determination.” 

‘^Every  person  is  entitled  to  a certain  remedy  in  the 
law  for  the  redress  of  all  injuries  or  wrongs  he  may 
receive  in  his  person,  property,  or  character.  Cut  he 
is  not  entitled  to  any  particular  remedy.  Due  process 
of  law  means  an  orderly  proceeding  adapted  to  the  na- 
ture of  the  case,  in  which  the  citizen  has  an  opportuni- 
ty to  be  lieard  to  defend,  enforce,  and  protect  his 
rights;  and,  where  such  opportunity  is  granted  by  the 
law,  the  citizen  cannot  complain  of  the  procedure  to 
which  he  is  required  to  conform. 

^^In  a case  like  that  under  consideration,  where  a 
claim  is  made  against  a city  or  county,  the  presenta- 
tion of  the  claim  to  the  administrative  officers  for  their 
action  is  the  initiation  of  proceedings  to  enforce  its 
payment.  By  the  presentation  the  claimant  adopts  that 
method  of  enforcing  his  rights.-  He  is  bound  to  follow 
up  his  claim,  and  pursue  the  remedy  pointed  out  by 
the  charter  or  statutes  for  its  enforcement,  and  is  af- 


118 


forded  aiii])le  opportunity  for  a comi)lete  investiga- 
tion and  liearing  ni)on  tlie  merits  of  liis  claim.  And^ 
tliongii  no  notice  of  a])ijeal  is  r(‘(inired  to  be  served 
upon  liim,  he  is  apprised  by  the  law  of  the  manner 
of  taking  such  a])peals;  and,  unless  he  wholly  aband- 
ons his  claim  after  its  jillowance  by  the  city,  he  will 
have  actual  knowl(*dg(^  that  it  has  b(*(*n  taken.  This 
answers  evei*y  ])nrj)os(*,  and  is,  ‘dne  })i'(,cess  of  law.' 

‘‘Th(^  administrative^  (;t1ic(*]*s,  tin*  board  of  county 
commissioners  or  the  (dty  council,  in  ]iassing  n]mn  and 
allowing  or  disallowing  the  claims,  act  r/uaxi  judicial- 
ly. They  determim*  tin*  l(*gal  rights  of  the  jiarties,  and 
th(‘r(‘  is  no  force  to  tin*  sngg(*stion  that  th(‘  chai't(*r  is 
invalid  b(*cans(^  it  ]>rovides  for  an  appeal  from  a non- 
jndicial  to  a judicial  fribnnal." 

In  speaking  of  a d(*cision  of  the  V.  S.  Land  1 )(^])artnient 
in  Lamsou  r.  Colfiu,  102  .Minn.  lOd-oOO,  onr  court  said: 

‘‘That  was  tln^  only  tribunal  (inalil1(*d  or  with  juris- 
diction to  det(0*min(‘  tin*  (oxistence^  (d‘  the*  facts  oseji- 
tial  to  th(‘  alleged  right,  and  its  comdnsion  tlnn-ein 
])recltid(‘s  further  iminiiw  by  the  courts." 

In  Murray  t*.  Hohokcu,  ct<\,  Co.,  18  How.  280  (L.  Ed. 
372),  the  Supreme  Court  also  said  : 

“It  is  true,  also,  that  even  in  a suit  between  pri- 
vate i)ersons  to  try  a (luestion  of  private  right,  the  ac- 
tion of  the  executive  ])ower  u])on  a matter  committed 

. to  its  determination  l)y  the  constitution  and  laws  is 
conclusive.’’ 

It  would  seem  that  the  state  can  require  claims  ag-ainst 
it  to  be  presented  first  to  another  department  than  the 
courts;  if  a system  Avere  worked  out  by  Avhich  the  claims 
could  be  assumed  by  the  state  this  could  be  done  here,  prob- 
ably. We  will  leave  that  for  further  investigation. 

It  is  sufficient  here  and  now  to  say  that  fault  is  not  nec- 
essarily the  basis  of  liability  in  dangerous  employments. 


119 


f. 

Trial  hy  Jury. 

It  may  be  said  that  the  right  of  trial  by  jury  is  abridgcnl. 
To  this  there  are  two  answers : 

1.  The  amount  being  fixed  quite  definitely  by  law,  and 
arbitration  first  required^  tlie  riglit  of  trial  by  jury  could 
still  exist  as  it  does  noAV  if  the  agreement  Avere  not  reaclieii. 

2.  If  the  right  of  action  thus  created  sliould  be  held  to 
be  one  not  in  existence  at  the  time  of  the  adoption  of  the 
constitutional  provision,  then  that  provision  would  not  ap- 

piy- 

In  Board  of  County  Com.  v.  Morrison,  22  Minn.  178,  the 
court  said: 

' ‘^Whether  the  tax  payer  is  entitled  to  a jury  trial  in 
these  proceedings  is  an  important  question,  as  it  af- 
fects both  the  power  of  the  state  to  collect  its  reA^enues 
by  a speedy  and  conA^enient  mode,  and  the  security  of 
the  citizen  against  oppression  and  illegal  acts.  It  is 
claimed  that  because  legal  rights  are  involved  and  are 
to  be  determined,  it  is  a proceeding  at  law,  and  that 
in  all  proceedings  at  law  the  right  to  a trial  by  jury  is 
guaranteed  by  the  constitution.” 

Board  of  County  Com.  v.  Morrison,  22  Minn.  178-9. 

And  after  citing  many  special  proceedings  such  as  those 
in  Eminent  Domain,  Assignment  of  ProiDerty  for  High- 
ways, Appointing  Guardians,  Summary  Convictions  for 
Petty  Offences,  etc.,  the  court  said: 

‘‘The  general  principle  upon  which  these  cases  were 
decided  was  that  the  several  constitutions  intended 
only  to  preserve  the  right  of  trial  by  jury  in  those 
cases  where  it  existed  at  the  adoption  of  the  respective 
constitutions,  and  that  rights  of  persons  or  property 
coming  in  question  in  those  controA^ersies  in  which,  be- 
fore that  time,  the  right  was  not  recognized  do  not 


120 


come  within  the  meaning  of  the  constitutional  guar- 
anties.’’ 

Board  of  County  Com.  v.  Morrison,  22  Minn.  178- 
181. 

At  the  time  of  the  adoption  of  our  constitution  no  such 
risk  as  would  be  here  involved — outside  of  fault — was  a 
legal  right.  This  would  not  be  a common  law  liability 
but  a statutory  one.  The  common  law  liabilities  for  fu- 
ture may  be  repealed. 

Martin  v.  Pittshiirg,  etc.  Co.,  203  U.  S.  284  (L.  Ed. 

184). 

This  has  been  partially  done  every  time  the  liability  ha»s 
been  lessened  or  changed. 

VII. 

THIS  SORT  OF  LAW  WOULD  NOT  TAKE  PRI- 
VATE PROPERTY  FOR  PUBLIC  USE  BY  REASON 
OF  TWO  PRINCIPLES. 

(a)  Under  our  special  compact  the  private  owner  has 
no  ownership  except  that  which  is  subject  to  reasonable 
control  such  as  this  would  be. 

(b)  The  private  individual  has  no  right  to  complain  of 
the  taking  of  only  so  much  property  as  is  an  aid  to  gov- 
ernment operation  by  reason  of  the  last  above  principle. 

II  'ouhl  this  take  private  property  for  piihlic  use? 

The  prohibition  in  the  Federal  Constitution  against  tak- 
ing private  property  for  public  use,  is  like  the  trial  by  jury 
not  material  in  the  state  court  for  it  refers  to  the  Federal 
government;  but  the  bill  of  rights  of  the  states  generally 
cover  this  same  point.  The  constitution  of  Minnesota 


121 


Art  I,  Sec.  12,  i)ro\  ides  : 

‘‘J*rivate  ])ro])erty  sliall  not  be  taken,  destroyed  or 
damaged  for  ])nl)lic  use,  witliont  just  coin})ensation 
therefor  first  ])aid  or  secured.’' 


a. 


A.U  ProjKi'lif  Held  Siihjccf  lo  llic  idocUd  (Join-iHicf. 

In  M ii(/lcr  c.  Kansas,  122  U.  S.  ()22-()(;5,  it  is  said  with  re- 
spect to  dejirivation  of  jn-oiierty  witliont  due  process: 

‘‘It  has  never  beini  r(\iiarded  as  incoin})atible  witli 
tlie  ])rinci])le,  ecjnally  vital,  because  ('ssential  to  the 
lieace  and  safety  of  society,  that  all  ]iroi)erty  in  this 
conntry  is  held  under  the  implied  obli<»;ation  that  the 
owner's  nse  of  it  shall  not  be  injnrions  to  the  coin- 
ninnity.” 

See  cases  nnder  Snbd.  II,  sapra. 

In  Knox  r.  Lee  and  Parker  r.  Doris,  79  U.  S.  157  (L.  Ed. 
307)  the  supreme  court,  at  p.  307,  said: 

^^Indeed,  the  whole  history  of  the  Government  and 
of  coiiGTessional  leiiislation  has  exhibited  the  nse  of  a 
very  wide  discretion,  even  in  times  of  peace,  and  in  the 
absence  of  any  tryiiiG*  emerG-ency,  in  the  selection  of 
the  necessary  and  proper  means  to  carry  into  effect 
the  great  objects  for  which  the  government  was  fram- 
ed, and  this  discretion  ’has  generally  been  unques- 
tioned, or  if  questioned  sanctioned  by  this  court.  This 
is  true  not  only  when  an  attempt  has  been  made  to 
execute  a single  power  specifically  given,  bnt  equally 
true  when  the  means  adopted  have  been  appropriate 
to  the  execution,  not  of  a single  authority,  bnt  of  all 
the  powers  created  by  the  constitution.'’ 

. In  AIcCuIlough  v.  ManjJand,  1 Wheaton,  416,  L.  Ed.  605, 
in  the  holding  that  Congress  had  not  exceeded  its  powers 
in  creating  the  national  bank  Chief  Justice  Marshall  said : 

^^Letthe  end  be  legitimate;  let  it  be  within  the  scope 


122 


of  the  Constitution,  and  all  means  which  are  appro- 
priate, which  are  plainly  adapted  to  that  end,  which 
are  not  prohibited  but  consistant  with  the  letter  and 
spirit  of’tlie  Constitution  are  constitutional.'’ 

In  the  Knox  case,  the  court  further  said: 

‘‘It  may  be  conceded  that  Congress  is  not  authoriz- 
ed to  enact  laws  in  furtherance  even  of  a legitimate 
end,  nierel}^  because  they  are  useful,  or  because  they 
make  the  government  stronger.  There  must  be  some 
relation  between  the  means  and  tlie  end;  some  adapt- 
edness or  approi)riateness  of  the  laws  to  carry  into 
execution  the  powers  created  by  the  constitution.  Hut 
when  a statute  has  proved  effective  in  the  execution 
of  powers  confessedly  existing,  it  is  not  too  much  to 
say  that  it  must  have  had  some  ap])ropriafeiiess  to 
the  execution  of  those  ])owers.  The  rules  of  construc- 
tions heretofore  adopted,  do  not  demand  tliat  the  re- 
lationshi])  between  the  means  and  the  end  shall  be  di- 
rect and  immediate.  Illustrations  (d‘  this  may  be 
found  in  several  of  the  cases  above  cited.  The  char- 
ter of  a bank  of  the  United  states,  the  priority  given 
to  debts  due  the  government  (;ver  lu'ivate  debts,  and 
the  exeiu])tion  of  federal  loans  from  liability  to  state 
taxation,  are  only  a few  of  the  many  whicli  might  be 
given.  The  case  of  JianJ:  r.  Fen  no,  8 Wall.  538  (75  U. 
S.  XIX  482)  presents  a suggestive  illustration.  There 
a tax  of  ten  per  cent  on  state  bank-notes  in  circula- 
tion was  held  constitutional,  not  merely  because  it 
was  a means  of  raising  revenue,  but  as  an  instrument 
to  put  out  of  existence  such  a circulation  in  competi- 
tion Avith  notes  issued  by  the  government.  There, 
this  court  speaking  through  the  Chief  Justice  avoAved 
that  it  is  the  constitutional  right  of  Congress  to  ])ro- 
vide  a currency  for  the  Avhole  country;  that  this  might 
be  done  by  coin  or  United  8>tates  notes,  or  notes  of  na- 
tional banks;  and  that  it  cannot  be  questioned  Con- 
gress may  constitutionally  secure  the  benefit  of  such  a 
currency  to  the  people  by  appropriate  legislation.  It 
Avas  said  that  there  can  be  no  question  of  the  power 
of  this  government  to  emit  bills  of  credit,  to  make 
them  receivable  in  paAunent  of  debts  to  itself;  to  fit 
them  for  use  bv  those  Avho  see  fit  to  use  them  in  all  the 
transactions  of  colnmerce;  to  make  them  a currency 


123 


uuiform  in  value  and  description,  and  convenient  and 
useful  for  circulation.  Here  the  substantive  power 
to  tax  was  allowed  to  be  einplf)yed  for  im]u*ovin<^  tlie 
currency.  It  is  not  easy  to  see  why  if  state  bank  notes 
can  be  taxed  out  of  existence  for  tlie  purposes  of  indi- 
rectl^y  inakin<^  United  States  notes  more  convenient 
and  useful  for  commercial  pur])oses,  the  same  end  may 
not  be  secured  directly  by  makiii2:  tliem  a leji^al  ten- 
der.” 

K}i().r  V.  Lee  and  Parker  r.  Davis,  70  U.  S.  457, 
L.  Ed.  307. 

In  United  Stales  v.  Lj/iuih,  188  U.  S.  445  (L.  Ed.  539) 
the  court  said : 

^‘Tbere  Iiave  been  many  cases  in  wliicb  a distinction 
has  been  drawn  between  tlie  taking  of  iirojierty  for 
public  uses  and  a consequential  injury  to  sucli  proper- 
ty by  reason  of  some  public  work.  In  the  one  class 
the  law  implies  a contract,  a promise  to  pay  for  the 
property  taken,  which,  if  the  taking  was  by  the  general 
government,  will  uphold  an  action  in  the  court  of 
claims;  while  in  the  other  class  there  is  simply  a tor- 
tious act  doing  injury  over  which  the  court  of  claims 
has  no  jurisdiction.  Thus  in  'Northern  Transporta- 
tion Company  v.  Chieago,  99  U.  S.  635,  25  L.  Ed.  336, 
the  city,  duly  authorized  by  statute,  constructed  a 
tunnel  along  the  line  of  La  Salle  Street,  and  under  the 
Chicago  Eiver.  The  Company  claimed  that  it  was  de- 
prived of  access  to  its  premises  by  and  during  the 
construction.  This  deprivation  was  not  permanent  but 
continued  only  during  the  time  necessary  to  complete 
the  tunnel,  and  it  was  held  that  there  was  no  taking 
of  the  property  but  only  an  injury,  and  that  a tempo- 
rary injury' thereto.  In  the  course  of  the  opinion,  af- 
ter referring  to  the  Pnmpelly  Case,  13  Wall.  166, 
20  L.  Ed.  557,  and  Eaton  v.  Boston,  C.  & ill.  R.  Co.,  51 
N.  H.  504,  12  Am.  Kep.  147,  we  said  (p.  642,  L.  Ed., 
p.  338)  : t 

Hn  those  cases,  it  was  held  that  permanent  flood- 
ing of  private  property  may  be  regarded  as  a ^Tak- 
ing.” ’ In  those  cases  there  was  physical  invasion  of 
real  estate  of  the  private  owner,  and  a practical  ouster 
of  his  possession.  But  in  the  present  case  there  was 


124 


no  such  invasion.  No  entry  was  made  upon  the  plain- 
liff’s  lot.  All  that  was  done  was  to  render  for  a time 
its  use  more  inconvenient.’^ 


b. 

lliere  is  no  Vested  RUjlit' Contrary  to  the  Social  Compact. 

In  the  case  of  Gibson  v.  United  States^  16G  U.  S.  269,  L. 

Ed.  995,  the  Supreme  Court  said : 

^‘The  5th  amendment  to  tlie  Constitution  of  the 
United  States  provides  that  private  propert}^  shall 
^not  be  taken  for  public  use  without  just  compensa- 
tion.’ Here,  however,  the  damage  of  which  ^Irs.  Gib- 
son complained  was  not  the  result  of  the  taking  of  any 
part  of  her  property  whether  upland  or  submerged, 
or  a direct  invasion  thereof,  but  the  incidental  conse- 
quence of  the  lawful  and  proper  exercise  of  a govern- 
mental power. 

^‘The  applicable  principle  is  expounded  in  Northern 
Transp.-  Co.  v.  Chicago,  99  U.  S.  635,  L.  Ed.  336. 
In  that  case  plaintiff  being  an  owner  of  lands  situated 
at  the  intersection  of  La  Salle  Street,  in  Chicago,  with 
the  Chicago  Eiver,  upon  wliich  it  had  valuable  ware- 
house and  dock  accommodations  with  a numerous  line 
of  steamers  accustomed  to  laud  at  that  dock,  was  in- 
terrupted in  his  use  thereof  by  the  building  of  a tunnel 
under  the  Chicago  river,  by  authority  of  the  state  leg- 
islature, in  accomplishing  which  work  it  was  necessary 
to  tear  up  La  Salle  Street,  which  precluded  plaintiff 
from  access  to  his  property  for  a considerable  time; 
also  to  build  a coffer  dam  in  the  Chicago  river  which 
excluded  his  vessels  from  access  to  his  docks;  and  such 
• an  injury  was  held  to  be  damnum  acsqne  injuria.  This 
court  said  again  s peaking  through  Mr.  Justice  Strong : 
^But  acts  done  in  the  proper  exercise  of  govem- 
ment^J  powers  and  not  directly  encroaching  upon  pri- 
vate property,  though  their  consequences  may  impair 
its  use,  are  universally  held  not  to  be  a taking  with- 
in the  meaning  of  the  constitutional  provision.  They 
do  not  entitle  the  ovmer  of  such  property  to  compen- 
sation from  the  state  or  its  agents,  or  give  him  any 


125 


ri«lit  of  action.  Tliis  is  sn])])ort(Ml  ])v  an  iimiKOise 
weii>lit  of  antlioritv.  Tliose  wlio  arc  curious  to  s(*c  the 
decisions  will  find  tliein  collectcMl  in  Cooh'ij'oii  Consti- 
tiLtional  Li Hiifations,  ]).  512  and  not(‘s.” 

In  t]i(‘  case  of  y(nule}'J}ur<jh  r.  (Jifjj  of  M iinica poJis^  98 
Minn.  329,  tlie  court  said  : 

‘^And  it  cannot  be  donl)ted  tliat  wli(*re  ]irivat(‘  i-iiijlits 
are  invaded  by  le^islat  iv(‘  antlioi'itx^  in  (1k‘  inl(o*ests 
of  the  o'eneral  ])nblic,  tli(*re  is  a takiniL»'  oi'  (bima.i»in;^ 
for  ])iiblic  use,  Avitbin  tlie  nH*anino’  of  tln^  ciaistitntion, 
entitlini>-  the  injnrcMl  ])arty  to  coinj)ensation,  exce])t 
])erlia])s  in  cases  where  an  exercise  of  the  ])olice  ]>ower 
is  involved.’' 

In  the  case  of  ^tate  v.  Hoard  of  Coanfij  ('om laissioiicrsy 
98  Minn.  89,  on  pa«e  91,  tlie  court  said: 

further  donbt  also  arises  wliether  tlie  county  or 
its  officers  conld  be  lield  res])onsible  in  daina.i»es  for 
Avork  done  for  the  jmblic  «’ood  in  its  i>’overnniental  ca. 
pacify  nnder  tlie  police  ]ioAA'er  or  ])OAver  of  eminent  do- 
main (Lic)i  r.  Board  of  Co.  Comiars.  of  Aormau  Coun- 
ty, 80  ]Minn.  58,  82  X.  AV.  1091 ) and  Avhetlier  sncli  dam- 
ages be  not  merely  incidental  to  an  anthorized  act.” 

In  Adair  r.  United  States,  208  U.  S.  161,  it  is  said: 

Til  is  court  has  said  that  bn  eA^ery  Avell  ordered  so- 
ciety, charged  with  the  duty  of  conserving  the  safety 
of  its  members,  the  rights  of  the  individual  in  respect 
of  his  liberty  may,  at  times,  under  the  pressure  of 
great  daugers,  be  subjected  to  such  restraint,  to  be  en- 
forced by  reasonable  regulations,  as  the  safety  of  the 
general  public  may  demand.” 

Adair  r.  U.  S.,  208  U.  S.  161  (L.  Ed.  136). 


If  the  police  poAver  could  not  make  reasonable  regula- 
tions the  state  could  not  exist. 

Indeed  it  Avould  seem  that  substantially  all  the  direct 
benefits  of  organized  society  are  based  on  this  limitation 
of  personal  rights  that  the  public  may  benefit.  This  seems 


126 


especially  Irue  in  -a  government  based  as  is  onrs  on  tlie 
compact  tlieor3\ 

In  Conn,  the  court  said  : 

^‘The  principle  of  the  common  law,  that  for  a law- 
ful, reasonable  and  careful  use  of  pro])ertv,  tlie  owner 
cannot  be  made  liable,  is  not  so  wrongiit  into  the  con- 
stitution or  into  tlie  very  idea  of  jiroiierty  tliat  it  can- 
not be  dejiarted  from  by  tlie  legislature  wlnn-e  protec- 
tion to  persons  or  to  iirojierty  may  re(|nire  it." 

Grisscll  i\  H ousatoiiic  /*.  h\  Co.,  54  Conn.  447. 

In  the  case  of  Johnson  r.  Cifi/  of  St.  Louis,  172  FediTal, 
40  (8  C.  C.  A.)  the  conrt  said: 

^C\s  we  understand  tlie  (f(M*isions  of  that  court 
('Missouri)  this  is  their  result:  The  word  ‘damaged’ 

in  that  Constitution  iiiclnd(‘s  damage  to  adjoining 
property  from  the  establishment  or  the  change  of  a 
grade  of  a street  or  alley,  from  the  reduction  of  a 
street  or  alley  to  an  e%stablished  grade,  and  from  the 
pollntion  of  the  waters  of  a creek  witl  sewage,  and 
for  these  damages  recoveries  mav  be  had  therennder, 
althongh  they  were  lawfully  indicted.  On  the  other 
hand,  the  word  hlamaged’  in  that  Constitution  ex- 
cludes damage  to  adjoining  ]iroperty  by  deiireciation 
of  its  valne,  by  obstruction  of  access  to  it,  by  noise,  by 
smoke,  by  cinders,  by  the  cracking  and  falling  of  the 
walls  of  bnildings  from  the  removal  of  lateral  sup- 
port when  these  injuries  are  caused  either  by  the  open- 
ing of  a stone  sidewalk  and  basement  wall  and  the 
erection  of  poles  therein,  or  by  the  construction  and 
operation  of  a dre  engine  house,  or  by  the  constrnc- 
tion  and  operation  by  steam  of  a railroad  upon  the 
street  jnst  in  front  of  a lumber  factory,  or  by  the  lay- 
ing of  a sewer  or  a pavement  in  an  alley  lower  than 
the  foundation  of 'the  bnildings  npon  the  abutting 
property  whereby  their  lateral  support  is  weakened 
and  they  become  cracked  and  injured.  The  case  at 
bar  falls  within  the  latter  class.  The  plan  of  the  sew- 
er in  question  here  was  not  necessarily  dangerous  to 
the  plaintiff's  property.  The  city  had  the  right  to 
make  and  nse  it.  The  excavation  for  it  was  to  be 


127 


made,  and  it  'was  made  wholly  within  the  alley.  The 
plaintiff  knew  it  was  to  he  made  and  was  aware  of 
the  danger  that  his  building  would  settle  and  crack 
therefrom  in  time  to  have  propped  and  jjrotected  it, 
and  according  to  the  decisions  of  the  Sui>reme  Court 
of  Missouri  his  damage  was  damnum  ahs(jue  injuria, 
and  he  was  entitled  to  no  compensation  for  it  under 
the  Constitution  of  that  state.'’ 

This  whole  question  relates  to  the  use  of  ])roperty;  it 
may  be  machinery  or  the  right  of  contract — each  equally 
property — but  it  is  nevertheless,  a limitation  upon  the  use. 
This  limitation  is  based  upon  the  theory  that  the  use  is 
dangerous  and  the  consequences  must  follow  as  a legal 
duty.  Judged  by  the  usual  rule  of  following  moral  obli- 
gations with  human  law  this  legal  duty  is  a proper  one. 
Judged  by  the  implied  condition  that  law  only  recognizes 
the  ownership  and  use  of  property  by  virtue  of  the  social 
compact,  the  owner  is  not  an  absolute  one  except  in  the 
private  sense — his  rights  are  always  subservient  to  the 
necessary  public  control.  When  he  enters  or  adopts  the 
social  compact  he  impliedly  so  agrees. 


128 


VIII. 


THE  FOURTEENTH  AMENDMENT  SECURES  THE 
LIBERTY  OF  CONTRACT  BETWEEN  EMPLOYER 
AND  EMPLOYE  EXCEPT  WHEN  LIMITED  BY  THE 
POLICE  POWER;  THE  EXERCISE  OF  THE  POLICE 
POWER  RESTS  IN  THE  LEGISLATIVE  DEPART- 
MENT; THE  COURTS  INTERFERE  TO  UPHOLD 
THE  CONSTITUTION  ONLY  TO  PREVENT  ARBI- 
TRARY POWER  FROM  BEING  EXERCISED  UNDER 
COVER  OF  THE  POLICE  POWER, 

(a)  The  courts  recognize  that  tlie  employer  and  the  em- 
ploye do  not  stand  on  an  equality  in  making  their  con- 
tracts. 

(b)  The  police  poAver  is  used  to  regulate  insurance  of 
private  property  and  the  control  of  employer  and  em- 
ploye. 

(c)  No  OAvner  of  property  has  the  right  to  claim  that 
a contract  previously  in  existence  has  been  changed  in  its 
obligations  by  reason  of  the  exercise  of  the  police  poAs^er 
because  the  implication  of  the  poA\^er  always  Avent  with 
that  contract  as  a matter  of  law. 

(d)  The  police  power  can  neither  be  legislated  nor  con- 
tracted aAvay. 

This  is  the  great  Federal  Constitutional  question  with 
respect  to  iWorkmen’s  Compensation  Acts.  Can  we  say 
that  employer  and  employee  must  stand  by  regulations  up- 
on this  question.  In  my  opinion^  Yes. 

The  police  power — the  public  power  to  protect  the  in- 
terests of  humanity  for  public  preseiwation  is  the  safety 
valve  here.  * ' 


12!) 


I''rc<‘d(nn  of  (^oiilrart  is  Libert  i/. 

Ill  Adair  r.  L.  S.,  20(S  I".  S.  KJl  ( L.  Mr.  .Jus- 

tice Ilurlaii  r(^-(|;i()t(^s  fr  in  L,:Linr  r.  \nr  )'orh\  IDS  \\ 
S.  45,  as  follows : 

“Tlie  <>(‘iieral  rij'lit  to  make*  a contract  iu  reflation 
to  liis  business  is  ]mrt  of  tin*  lib(*rlv  (,f  tin*  individ- 
ual ])rot(‘ct(*d  by  tin*  141b  aiin*ndnn*nt  of  tin*  f(*d(*ral 
constitution.-’ 

Later  on  tin*  court  says: 

“ITnd(*r  that  jirovision  no  state*  can  d(*in*iv(*  any  iH*r- 
son  of  life*,  libe*rty  eir  ])ro]H*rty  witbont  elne*  ](i‘oe*e*ss  e>f 
law.  Tin*  rii*lit  to  juirediase*  e>r  to  se  ll  lab  a*  is  part  e>f 
the  libe*rty  ))rote*e-te*el  by  t b is  aiin*nejiin  lit,  nnle*ss  llie*re 
are  e-ire*nmstane*e*s  wbie-b  e*\ednele*  tbe*  riebt.** 

Adair  r.  T\  *S.,  20S  V.  S.  Ibl  t L.  Kd.  4.4b). 

The  cenirt  held  in  that  e-ase*  that  tin*  e-emstitntion  was 
vieilated  in  this  res]iect  by  an  Ae-t  eif  roipi»ress  iiiterfe*ring 
with  the  right  te>  discharge  einjiloyes  freiin  inembershi])  in 
a labor  union,  as  there  was  nei  reasonable  cemnectioii  be- 
tween that  union  anel  the  commerce  danse;  but  the  court 
was  not  nnanimons. 

Mr.  Justice  McKenua  and  Mr.  .Justice  Holmes  wrote  dis- 
senting opinions,  and  contended  that  it  would  be  for  the 
value  of  all  concerned,  and  within  the  powers  and  prin- 
ciples recognized  by  that  court,  to  recognize  the  organiza- 
tion of  the  laboring-man  with  respect  to  interstate  com- 
merce; Mr.  Justice  McKenna  saying: 

^^T\^e  are  dealing  with  rights  exercised  in  a quasi- 
public  business,  and  therefore  subject  to  control  in  the 
interest  of  the  public.” 

Mr.  Justice  Holmes  said: 

^^Bnt  I could  not  pronounce  it  unwarranted  if  Con- 
gress should  decide  that  to  foster  a strong  union  was 
for  the  best  interest  not  only  of  the  men  but  of  the  rail- 
roads and  the  country  at  large.” 


130 


In  Gray  v.  Huild’uKj,  Trades  CoaiKdl,  01  Minn.  171-182, 
our  court  said : 

^^Tlie  constitution  of  onr  stat(‘  i>nai-anti(‘s  lil)crty 
to  (‘V(a'V  citizen,  and  a certain  r(‘in(‘dy  in  the  laws  for 
all  injuries  or  wrongs  which  lu*  nuiy  receive^  in  his  ]ier- 
son,  j)roi)erty,  or  chai‘act(‘r,  and  th(‘  rights  so  i*naran- 
teed  are  fundainental,  and  can  1h»  taloni  away  only 
by  tin*  law  of  tin*  land,  oi'  interfered  with,  or  tin*  en- 
joyment tli(‘r(‘of  in(Hlih(Ml,  only  bv  lawful  r(‘^nlations 
ado])t(*d  as  ii(‘C(‘ssary  for  tin*  i:,(*nei*al  jenblic  w(*lfarc% 
* * * A ])(*rsoirs  occnjiation  or  calling-,  by  which 

he  earns  a liv(*lihood  and  (*nd(*avors  to  b(*tt(*r  his  con- 
dition, and  te)  ])rovid(*  for  and  sn]>iH  rt  hiinsHf  and 
those*  ele*])e*neb‘nt  njuni  him,  is  ];ro]ie*rly  within  the 
meanin«»'  of  1 he*  law.  ami  e*ntitle*e1  to  in-ote*e't  ion  as  sneb  ; 
and  as  ce)ndne‘teel  bv  the*  me*rohant,  by  the*  eoipital ist, 
by  the  e'ontractor  e>r  labnre*r,  is,  asiele*  from  the*  i»-oods, 
e*hatte*ls,  mone*y,  en*  effe*e-ts  (*m])le>ye*d  and  used  in  e-e)U- 
needion  ther(*with,  ])re)])e*rty  in  e*ve*ry  sense  e>f  the 
wejrel.'’ 


Liherty  of  coairad  noi  ahsfdatr  irhrn  apylicd  to  cm- 
player  and  nnployee  in  danfferons  enipl()y)aeats. 

In  Holden  r.  Hardy,  IGO  U.  S.  SGG  (L.  Ed.  780  ),  the  8ii- 
])reme  re)nrt  held  that  the  right  e)f  ceintiaed  may  be  limited 
by  the  state  pe)lice  ])Ower  with  respect  to  the  hours  of  la- 
bor in  unelergronnel  mines. 

After  a somewhat  extended  discussion  of  wliat  is  meant- 
by  the  pe)lice  powers  of  the  state  and  the  decisions  resting 
thereon,  and  the  fact  that  the  changes-  under  our  system 
must  be  made  to  co-operate  with  the  advance  of  law  to  meet 
the  changing  conditions  of  society,  the  court  said  : 

^‘Of  course  it  is  inii)ossible  to  forecast  the  character 
or  extent  of  these  changes,  but  in  view  of  the  fact  that, 
from  the  day  J/r/r/ae.  Chart  a was  signed  to  the  present 
moment,  amendments  to  the  structure  of  the  law  have 
been  made  with  increasing  frequency,  it  is  impossible 
.to  suppose  that  they  will  not  continue,  and  the  law  be 


131 


forced  to  adapt  itself  to  new  conditions  of  sf)cietj,  and, 
particularly,  to  tlie  new  relations  between  employers 
and  employees,  as  they  arise.  * * * 

‘‘This  rijjjlit  of  contract,  however,  is  itself  subject  to 
certain  limitations  which  the  state  ma\^  lawfully  im- 
pose in  the  exercise  of  its  police  powers.’’ 

. ]JoJd(m  V.  Hardy,  100  U.  S.  300  (L.  Ed.  780). 

/y5--/y<^ 

In  Atchison,  etc.  Ry.  Go.  v.  Matthews,  174  U.  S.  90  (L. 
Ed.  909),  in  discussing  a statute  of  Kansas  providing  that 
in  fire  cases  it  should  he  sufficient  to  establish  that  they 
were  occasioned  by  the  operation  of  a railroad,  the  loss  and 
the  damage,  to  make  a prima  facie  case  of  negligence,  the 
court  said : 

“Eut  neither  the  amendment — broad  and  compre- 
hensive as  it  is — nor  any  other  amendment  was  de- 
signed to  interfere  with  the  power  of  the  state,  some- 
times termed  its  police  power,  to  prescribe  regulations 
to  promote  the  health,  peace,  morals,  education  and 
good  order  of  the  people,  and  to  legislate  so  as  to  in- 
crease the  industries  of  the  state,  develop  its  resourc- 
es, and  add  to  its  wealth  and  prosperity.” 

Atchison,  etc.,  Ry.  Co.  v.  Mattheivs,  174  U.  S.  96 
L.  Ed.  909). 

In  the  case  of  Johnson  v.  SoiUhern  Pacific  Ry.  Co.,  196 
U.  S.  1,  it  was  held  that  the  equipment  of  cars  with  auto- 
matic couplers  might  be  required  by  congress. 

The  Chief  Justice  said,  at  p.  17  (L.  Ed.  369)  in  that 
opinion : 

“The  primary  object  of  the  act  was  to  promote  the 
public  welfare  by  securing  the  safety  of  employees  and 
travelers,  and  it  was  in  that  aspect  remedial,  while  for 
violations  a penalty  of  |100  recoverable  in  a civil  ac- 
tion, was  provided  for,  and  in  that  respect  it  was  pe- 
nal. But  the  design  to  give  relief  was  more  dominant 
than  to  inflict  punishment,  and  the  act  might  well  be 
held  to  fall  within  the  rule  applicable  to  statutes  to 
prevent  fraud  upon  the  revenue,  and  for  the  collection 


132 


of  customs, — that  rule  not  requiring  absolute  strict-  ' 
ness  of  construction.” 

Johnson  V.  Southern  Pacific  Co.,  106  U.  S.  1 (L. 
Ed.  369). 


Interference  icith  Right  of  Contract  Because  of  Inequality' 

of  Persons. 


In  Knoxville  Iron  Co.  v.  Harhison,  183  U.  S.  13  (L.  Ed. 
55),  the  court  liad  under  consideration  a provision  for 
the  redemption  of  store  orders  in  money  under  the  Ten- 
nessee Act  of  March  IT,  1889,  re(]uiring  all  persons  who 
issued  such  orders  to  employes  in  payment  of  wages,  to  re- 
deem them  in  money  on  any  regular  pay  day,  or  at  any 
time  within  thirty  days  after  they  were  issued;  it  held  tlie 
act  was  not  unconstitutional  as  an  arbitrary  interference 
with  the  right  of  contract,  but  was  a legitimate  exercise 
of  the  general  legislative  power,  as  well  as  of  the  police 
power. 

The  court  quotes  somewhat  from  the  Tennessee  decis- 
ions, and  then  says  at  page  61 : 

‘^The  supreme  court  of  Tennessee  justified  its  con- 
clusion bj^  so  full  and  satisfactory  a reference  to  the 
decisions  of  this  court  as  to  render  it  unnecessary  for 
us  to  travel  over  the  same  ground.  It  will  be  sufficient 
to  briefiy  notice  two  or  three  of  the  latest  cases. 

^Tn  Holden  v.  Hardy,  169  U.  S.  366,  L.  Ed.  780, 
18  Sup.  Ct.  Rep.  383,  the  validity  of  an  act  of  the 
state  of  Utah,  regulating  the  employment  of  working- 
men in  underground  mines,  and  fixing  the  period  of 
employment  at  eight  hours  per  day,  was  in  question. 
There,  as  here,  it  was  contended  that  the  legislation 
deprived  the  employers  and  employees  of  the  right  to 
make  contracts  in  a lawful  way  and  for  lawful  pur- 
poses; that  it  was  class  legislation,  and  not  equal  or 
uniform  in  its  provisions ; that  it  deprived  the  parties 


a. 


of  tlie  (‘(jiial  i)i'otoctioii^  of  tin*  hiws,  al)i-id;^(Ml  tlic  jjriv- 
and  inmmiiit  ios  of  llio  (kdVndaiit,  as  a ciliziMi  of 
the  Unil(*d  States,  and  deprived  him  of  his  proiandy 
and  ]il)(n*ty  witliont  dm*  ])r()C(*ss  (d'  law.  I>nt  it  was 
lield,  after  full  r(*vi(*w  of  tin*  pr(*vinns  cases,  lliat  tlie 
act  in  (|n(‘stion  was  a valid  (*x(*i*cis(*  (d‘  tla*  ])olic(*  pow- 
er of  th(*  state,  and  th(*  j iid_iLiim‘nl  of  tin*  siijiia'iiK*  court 
of  Utah,  snstainini»'  the  lei;islat ion,  was  atllirni(*d. 

“>\di(‘T(*  a (‘ontract  (d‘  in^airama*  jii'ovid(*d  that  tin*  in- 
snranc(*  cmiijiany  shmild  not  lu*  lijihh*  h(*yoml  tin*  ac- 
tual cash  \ alne  of  tin*  ])ro])(*i*ty  at  tin*  tinn*  of  its  loss, 
and  wln*re  a statnt(*  of  tin*  state*  of  .Missonid  provided 
that,  in  all  suits  l»rom:ht  upon  pirlici(*s  of  insni*ance 
ai^ainst  loss  or  dama.ue*  hy  lire*,  the*  iiisni*ane-e*  e*ompany 
shonlel  met  he*  ]>e*rmitte*d  to  ele*nv  that  the*  pro]»e*rty  in- 
sured was  woi'th  at  the*  tinn*  of  i^snim:-  the*  j»edie-y  the 
full  amount  e)f  the*  insnrane-e*,  this  e-onrt  helel  that  it 
was  com])ete*nt  fetr  the*  le*<iislat nre*  ed‘  Missf)iiri  to  ]>ass 
sne'h  a law,  e*ven  tlnmiih  it  ])lae*e*s  a limitation  ii])on 
the*  riiiht  e)f  contract.  Orirnl  Ins.  Co.  r.  Dtufijs,  172  I". 
S.  r>r>7,  L.  Ed.  552,  10  Snp.  ('t.  Ee*p.  281. 

“In  87.  Tjonis,  /.  J/.  ,S:  *8.  h*.  To.  r.  Paul,  173  U.  S. 
104,  L.  Ed.  74(),  10  Sii]).  Ut.  He*]).  410,  a jndijment 
etf  the*  sn])re*me  e-enirt  e>f  Arkansas  snstainins:  tlie  valiel- 
ity  of  an  act  etf  tin*  legislature  eif  that  state,  which  pro- 
Yide*d  that  whenever  anv  corporation  or  ]ierson  en- 
ii'aj*ed  in  operatino’  a railroad  should  dischai\t»e,  with 
ov  without  cause,  any  empleiyee  or  servant,  the  unpaid 
wa^es  of  any  such  servant  then  earned  should  hecome 
due  and  payable  on  the  date  of  such  discharo’e  with- 
out abatement  or  deduction,  was  affirmed.  It  is  true 
that  stress  was  laid  in  the  opinion  in  that  case  on  the 
■fact  that,  in  the  Constitution  of  the  state,  the  power  to 
amend  corporation  charters  was  reserved  to  the  state, 
and  it  is  asserted  that  no  such  power  exists  in  the  pres- 
ent case.  But  it  is  also  true  that,  inasmuch  as  the 
right  to  contract  is  not  absolute  in  respect  to  every 
matter,  but  may  be  snbiected  to  the  restraints  demand- 
ed by  the  safety  and  welfare  of  the  state  and  its  inhab- 
itants, the  police  power  of  the  state  may,  within  de- 
lined  limitations,  extend  over  corporations  outside  of 
and  regardless  of  the  power  to  amend  charters.  Atch- 
ison T.  k 8.  F.  F.  Co.  r.  Matthews,  174  IT.  S.  96,  L. 
Ed.  909,  19  Snp.  Ct.  Rep.  609.’’ 


134 


Knoxville  Iron  Co.  v.  Harbison,  183  U.  S.  13  (L. 

Ed.  55-61). 

This  case  not  only  interferes  with  the  right  of  private 
contract  in  a negative  way,  but  affirmatively  requires  the 
employers  to  pay  in  cash  rather  than  in  property,  if  the 
cash  be  demanded.  This  is  quite  a strong  precedent  for 
the  doctrine  of  affirmative  action  regulating  payment  to  em- 
ployes whicli  could  not  be  based  on  any  other  tlieory  than 
police  protection.  If  the  state  did  not  have  an  interest  in 
saying  that  proper  contracts  or  obligations  were  made 
it  had  no  business  in  this  controversy. 

In  the  case  of  Harbison  v.  Knoxville  Iron  Co.,  53  S.  W. 
955,  the  court  said : 

‘Tn  other  words,  the  effect  of  the  act  is  to  convert 
into  cash  obligations  sucli  unpaid  merchandise  orders, 
etc.,  as  may  be  presented  for  money  payment  on  a regu- 
lar pay  day,  or  as  much  as  30  days  after  issuance.  Un- 
der the  act  the  present  defendant  may  issue  Aveekly 
orders  for  coal  as  formerl}',  and  may  pay  them  in  that 
commodity,  when  desired  by  tlie  holder;  but,  instead 
of  being  able,  as  formerly  to  compel  the  holder  to  ac- 
cept payment  of  such  orders  in  coal,  tlie  holder  may, 
under  the  act,  compel  defendant  to  pay  them  in  money. 
In  this  way,  and  to  this  extent  the  defendant’s  right  of 
contract  is  affected.  Under  the  act,  as  former^,  every 
employe  of  the  defendant  may  receive  the  whole  or  a 
part  of  his  wages  in  coal  orders,  and  may  collect  the 
orders  in  coal,  or  transfer  them  to  some  one  else  for 
other  merchandise  or  for  money.  His  condition  is 
bettered  by  the  act,  in  that  it  naturally  enables  him 
to  get  a better  price  for  his  coal  orders  than  formerly, 
and  thereby  gives  him  more  for  his  labor;  and  yet,  al- 
though the  defendant  may  not,  in  that  transaction,  re- 
alize the  expected. profit  on  the  amount  of  coal  called 
for  in  the  orders,  it  in  no  event  pays  more  in  dollars 
and  cents  for  the  labor  than  the  contract  price. 

^The  scope  and  purpose  of  the  act  are  thus  indicat- 
ed. The  legislature  evidently  deemed  the  laborer  at 


135 


some  disadvantage  under  existing  laws  and  customs, 
and  by  tliis  act  undertook  to  ameliorate  liis  condition 
in  some  measure  by  enabling  liiiii,  or  his  bona  /ide 
transferee  at  his  election,  and  at  a jiroper  time,  to  de- 
mand and  receive  his  unpaid  wages  in  money,  rather 
than  in  something  less  valuable.  Jts  tendency,  though 
slight  it  may  be,  is  to  place  the  employer  and  employee 
u[)on  equal  ground  in  the  matter  of  wages,  and,  s.)  far 
as  calculated  to- accomplish  that  end,  it  deserves  com- 
mendation. * * * 

“Furthermore,  the  i)assage  of  the  act  was  a legiti- 
mate exercise  of  police  power,  and  upon  this  ground 
also  the  legislation  is  well  sustained.  The  first  riglit 
of  a state,  as  of  a man,  is  self-j)rotection,  and  with 
the  state  that,  right  involves  tlie  universally  acknowl- 
edged power  and  dut^^  to  enact  and  enforce  all  such 
laws,  not  in  plain  conflict  with  some  jjrovisiou  of  the 
state  or  federal  constitution,  as  may  rigidly  be  deemed 
necessary  or  expedient  for  the  safety,  health,  inorals, 
comfort,  and  welfare  of  its  people.  * * * • 

“This  power  is  an  important  and  comprehensive 
one,  and  its  application  must  be  expected  and  allowed 
to  expand,  and  take  in  new  subjects  from  time  to 
time,  as  trade  and  business  advance,  and  new  condi- 
tions arise.  The  scope  of  its  exercise,  within  the  bound 
already  mentioned,  is  limited  only  by  the  requirement 
that  it  shall  not  arbitrarily  and  unreasonably  affect 
the  citizen  in  his  life,  liberty  and  property.  * * * 

“It  is  readily  seen  from  the  analysis  already  given 
that  the  limitation  placed  upon  the  right  of  contract 
by  this  act  is  not  arbitrary  and  oppressive,  but  entire- 
ly just  and  reasonable.  While  in  some  sense  qualify- 
ing certain  contracts  of  the  employer,  it  in  no  sense 
works  a great  hardship  upon  him.  It  only  requires 
that  in  certain  events  he  shall  pay  the  wages  of  his 
employe  in  money,  rather  than  in  something  less  de- 
sirable. The  legislature,  as  it  thought,  found  the  em- 
ploye at  a disadvantage  in  this  respect,  and  by  this 
enactment  undertook  to  place  him  and  the  employer 
more  nearly  npon  an  equality.  ^This  alone  commends 
the  act,  and  entitles  it  to  a place  on  the  statute  book 
as  a valid  police  regulation.  * * * 

. “It  is  neither  prohibitory  nor  penal ; not  special, 
but  general;  tending  towards  equality  between  em- 


13G 


ployer  and  employe  in  tlie  matter  of  wages;  intended 
and  well  calcnlate^d  to  promote  peace  and  goad  order, 
and  to  prevent  strife,  violence,  and  bloodshed.  Such 
being  the  character,  pnri)ose,  and  tendency  of  the  act, 
we  have  no  liesitation  in  liolding  tliat  it  is  valid,  both 
as  general  legislation,  without  reference  to  the  state’s 
reserved  police  power,  and  also  as  a wholesome  regu- 
lation adopted  in  the  proj)er  exercise  of  that  power.” 
Jf arhinson^v.  Knoxville  Iron  Co.,  53  S.  AY.  955-59. 

AVhen  the  case  of  Lockner  v.  N.  Y.,  198  U.  S.  45  (L.  Ed. 
937),  came  before  the  court,  it  was  held  that  the  New  York 
law  limiting  the  hours  of  employment  in  bakeries  was  an 
arbitrary  interference  with  contract  and  therefore  could 
not  be  sustained  as  a police  regulation,  because  the  bakers’ 
trade  was  not  unhealthy  and  they  were  not  wards  of  the 
state  any  more  than  other  laborers  and  could  not  be  limit- 
ed in  their  right  of  contract.  The  court  said : 

^‘Of  course,  the  liberty  of  contract  relating  to  labor 
includes  both  parties  to  it.  The  one  has  as  niucli 
right  to  purchase  as  the  other  to  sell  labor.  * * * 
^‘AA^e  think  the  limit  of  the  police  power  has  been 
reached  and  passed  in  this  case.  * * ^ 

‘‘The  state  therefore,  has  poAver  to  prevent  the  in- 
dividual from  making  certain  kinds  of  contracts,  and 
in  regard  to  them  the  Federal  Constitution  offers  no 
protection.  If  the  contract  be  one  which  the  state,  in 
the  legitimate  exercise  of  its  police  power,  has  the 
right  to  prohibit,  it  is  not  piwented  from  prohibiting 
it  by  the  14th  Amendment.*  * * 

“It  is  manifest  to  us  that  the  limitation  of  the 
hours  of  labor  as  provided  for  in  this  section  of  the 
statute  under  which  the  indictment  was  found,  and 
the  plaintiff  in  error  convicted,  has  no  such  direct  re- 
lation to,  and  no  such  substantial  effect  upon,  the 
health  of  the  employee,  as  to  justify  us  in  regarding 
the  section  as  really  a health  law.  It  seems  to  us  that 
the  real  object  and  purpose  were  simply  to  regulate 
the  hours  of  labor  between  the  master  and  his  em- 
ployees (all  being  men,  sui  juris),  in  a private  busi- 
ness, not  dangerous  in  any  degTee  to  morals,  or  in 


137 


any  real  and  substantial  decree  to  the  health  of  tlie 
employees.  Under  sucli  cireuinstances  the  fi'eedoni 
of  master  and  em])loyee  to  contract  witli  eacli  otlier 
in  relation  to  their  employment,  and  in  dehniipi!^  the 
same,  cannot  be  ])rohibited  or  interfered  with,  without 
violatiiif?  the  Federal  Constitution.” 

Lockner  v.  N.  Y.,  19S  U.  S.  45  (L.  Ed.  037-44). 

The  above  quotation  clearly  leaves  room  for  such  legis- 
lation if  dangerous  to  either  health  or  body. 

This  case,  although  by  a bare  majority  opinion  as  to 
whether  that  was  a dangerous  employimmt,  nev(‘rtheless 
treated  the  question  in  all  res])ects  as  being  the  settled  doc- 
trine that  the  state  cannot  interfere  with  the  right  of  pri- 
vate contract  merely  because  it  would  desire  to  regulate 
employer  and  em])loye  if  there  were  no  jirdice  power  neces- 
sary. It  seems  to  ns  ditticnlt  for  any  person  bound  as  we 
are  with  the  duty  of  a neutral  investigation  of  this  sub- 
ject to  overlook  the  Aveighty  arguments  of  the  dissents  in 
the  aboA^e  decision. 

NotAvithstanding  the  Lockner  decision,  the  case  of  Mul- 
^ler  V.  Oregon,  20S  U.  S.  411  (L.  Ed.  551) , held  that  the  Ore- 
gon statute  limiting  the  hours  of  labor  of  women  in  laun- 
dries was  valid,  although  if  it  related  to  me  it  might  not, 
by  saying: 

^^Ea^cu  though  all  restrictions  on  political,  personal, 
and  contractual  rights  were  taken  away,  and  she  stood, 
so  far  as  statutes  vrere  concerned,  upon  an  absolutely 
equal  plane  with  him,  it  would  still  be  true  that  she 
is  so  constituted  that  she  will  rest  upon  and  look  to 
him  for  protection;  that  her  physical  structure  and  a 
proper  discharge  of  her  maternal  functions — having 
in  Auew  not  merely  her  own  health,  but  the  well  be- 
ing of  the  race — justify  legislation  to  protect  her  from 
the  greed  as  well  as  the  passion  of  men.  The  limita- 
tions which  this  statute  places  upon  her  contractual 
powers,  upon  her  rights  to  agree  with  her  employer  as 
to  the  time  she  shall  labor,  are  not  imposed  solely  for 


138 


her  benefit,  but  also  largely  for  the  benefit  of  all.  Many 
words  cannot  make  this  plainer.” 

Muller  V.  Oregon,  208  U.  S.  411  (L.  Ed.  551-550). 

With  respect  to  the  limitations  upon  the  right  of  con- 
tract, the  court  said : 

^‘It  is  undoubtedly  true,  as  more  than  once  declared 
by  this  court,  that  tlie  general  right  to  contract  in  re- 
^lation  to  one’s  business  is  part  of  the  liberty  of  the  in- 
dividual, protected  by  tlie  14th  Amendment  to  the  Fed- 
eral Constitution;  yet  it  is  equally  well  settled  that 
this  liberty  is  not  absolute  and  extending  to  all  con- 
tracts, and  that  a state  may,  without  conflicting  with 
- . the  provisions  of  the  14th  Amendment,  restrict  in 
many  respects  the  individual's  power  of  contract. 
Without  stopping  to  discuss  at  length  the  extent  to 
Avhich  a state  may  act  in  this  respect,  we  refer  to  the 
following  cases  in  which  the  question  has  been  con- 
sidered; Allgeyer  v.  Tjonisifnia,  105  U.  S.  578,  L.  Ed. 
832,  IT  Sup.  St.’ Rep.  427;  Holden  v.  Hardy,  109  U.  S. 
300,  L.  Ed.  780,  18  Sup.  Ct.  Rep.  383;  Lockner  v.  New 
York,  supra.” 

Muller  V.  Oregon,  208  U.  S.  411  (L.  Ed.  551-555). 

b. 

The  Police  Poiccr  Applied  to  Contracts  for  Property  In- 
surance. 

In  the  interests  of  the  police  power  the  state  may  pro- 
vide that  the  contract  of  fire  insurance  shall  be  so  regulat- 
ed as  to  prevent  insurance  companies  from  showing  that 
the  value  of  the  property  destroyed  after  insurance  before 
the  fire  occurred.  This  could  only  be  on  broad  grounds  of 
public  good.  It  was  decided  in  Insurance  Co.  v.  Dagg,  172 
U.  S.  55  (L.  Ed.  552),  where  the  court  said: 

, ^^In  Minneapolis  & I^t.  L.  By.  Company  v.  Beckioith, 
129  U.  S.  26  (L.  Ed.  585) , a law  of  Iowa  making  a class 
of  railroad  corporations  for  special  legislation  was 
sustained. 


139 


(3)  ‘What  it  is  for  a state  to  de|)ri\'e  a pei*son  of 
life,  liberty,  or  property  without  due  process  of  law^ 
is  uot  luuch  nearer  ^o  precise  detiiiitioii  today  than 
it  was  said  to  be  by  Mr.  Justice  Miller  in  Davkhoa  v. 
Ncic  Orleans^  90  U.  JS.  97  (L.  Kd.  010 j. 

‘‘The  process  ‘of  judicial  inclusion  and  exclusion’ 
has  })roceeded,  and  yet  this  court,  in  llohlcn  v.  Hardy, 
109  U.  S.  300  (L.  Kd.  780),  aiL^ain  declined  si  (‘cilic  defi- 
nition. 3Ir.  Justice  Ilrown,  sjieaking  for  the  court, 
said:  ‘This  court  has  never  attempted  to  deline  with 
precision  the  words  ‘due  process  of  law/  nor  is  it  nec- 
essary in  this  case.  It  is  sullicient  to  say  that  there 
are  certain  immutable  principles  of  justice  which  in- 
here in  the  very  idea  of  free  government,  which  no 
member  of  the  Union  may  disregard, — as,  that  no  man 
shall  be  condemned  in  his  person  or  property  without 
due  notice  and  an  opportunity  of  being  heard  in  his 
own  defense.’  These  princi]de  were  extended  to  the 
right  to  acquire  property  and  to  enter  into  contracts, 
with  respect  to  property;  but  it  was  said  ‘This  right 
of  contract,  however,  is  itself  subject  to  certain  limi- 
tations which  the' state  may  lawfull  impose  in  the  ex- 
ercise of  its  police  powers.”  ” 

Insurance  Co.  r.  Dar/gs,  172  U.  S.  563  (L.  Ed. 
552-5). 

See  Sf.  Louis  Iron  Mountain,  etc-,  By.  Co.  v.  Paul, 
173  U.  S.  101  (L.  Ed.  716). 


c. 

All  Contracts  are  Made  Sub  ject  to  the  Police  Power. 

In  Beer  Company  v.  Massachusetts,  97  U.  S.  25,  in  a 
liquor  case  the  court  'held  that  all  rights  are  held  subject 
to  the  police  power  of  the  state  and  that  the  legislature 
may  provide  for  the  discontinuance  of  that  which  is  in- 
jurious to  the  health,  notwithstanding  individuals  or  cor- 
porations may  thereby  suffer  inconvenience,  saying : 

“If  the  public  safety  or  the  public  morals  required 
the  discontinuance  of  any  manufacture  or  traffic  the 


140 


hand  of  the  legislature  cannot  be  stayed  from  provid- 
ing for  its  discontinuance  by  any  incidental  inconven- 
ience which  individuals  or  corporations  may  suffer.  All 
rights  are  held  subject  to  the  police  power  of  the  state.’^ 
See  Mugler  v.  Kansas^  supra. 

The  court  repeated  in  that  opinion,  what  it  has  laid  down 
in  otlier  cases,  this  caution : 

‘^Of  course  we  do  not  mean  to  lay  down  any  rule  at 
variance  with  what  this  court  has  decided  with  regard 
to  tlie  paramount  authoritj^  of  the  Constitution  and 
laws  of  the  United  States  relating  to  the  regulation 
of  commerce  Avitli  foreign  nations  and  among  the  sev- 
eral states  or  otherwise.’^ 

L.  Ed.  593  4. 

In  Holden  v.  llardy^  1G9  U.  S.  3GG,  in  speaking  of  re- 
forms likely  to  come  in  the  law  with  respect  to  employer 
and  employe  the  court  said : 

“That  while  the  cardinal  principles  of  justice  are 
immutable,  the  methods  by  which  justice  is  adminis- 
tered are  subject  to  constant  fluctuation,  and  that  the 
Constitution  of  the  United  States  which  is  necessarily 
to  a large  extent  inflexible  and  exceedingl,y  ditflcult 
of  amendment  sliould  not  be  so  construed  as  to  de- 
prive the  states  of  the  power  to  so  amend  their  laws 
as  to  make  them  conform  to  the  wishes  of  the  citizens 
as  they  may  deem  best  for  the  public  Avelfare  without 
bringing  them  into  conflict  vrith  the  supreme  law  of 
the  land.’’ 

After  reciting  that  it  would  be  impossible  to  forecast  the 
character  and  extent  of  such  changes  but  that  they  had 
come  from  Magna  Charta  down,  said : 

^^It  is  impossible  to,  suppose  that  they  will  not  con- 
tinue and  the  law  be  forced  to  adapt  itself  to  new  con- 
ditions of  society  and  particularly  to  the  new  regula- 
tions between  employers  and  employes  as  they  arise.’’ 

With  respect  to  the  right  of  contract  it  said : 

^^This  right  of  contract,  however,  is  itself  subject  to 


141 


A 


certain  limitations  which  the  states  can  lawfully  im- 
pose in  the  exercise  of  its  ])olice  |>owei*s.  Wliile  this 
power  is  inherent  in  all  ‘’•overnments  it  has  <l(mhtless 
been  i»reatly  (‘Xjiamled  in  its  ajiplicaiinii  <lurin;;  the 
l>ast  century  owim»:  to  an  (Uiorm ons  inc)*ease  in  the 
number  of  occupations  which  are  dangerous.** 

Re-quoting  from  ConnnomccaUh  r.  AJ(j(  r,  7 rush.  84,  to 
show  that  every  holder  of  i)roperty  under  organized  society 
holds  it  under  the  implied  liability  that  his  use  of  it  may 
be  so  regulated  as  to  protect  others  in  the  enjoyment  of 
their  proi)erty,  and  in  the  rights  of  the  community,  the  re- 
quotation  continues: 

^^All  property  in  this  commonwealth  as  well  that  in 
the  interior  as  that  bordering  on  tide  waters  is  de- 
rived directly  or  indirectly  from  the  government,  and 
held  subject  to  those  general  regulations  Avhich  are 
necessary  to  the  common  and  general  welfare.  Rights 
of  projierty  like  all  other  si>cial  and  conventional  rights 
are  subject  to  such  reasonable  limitations  in  their  en- 
joyments as  will  prevent  them  from  being  injurious 
and  to  such  reasonable  restraints  and  regulations  es- 
tablished by  law  as  the  legislature  under  the  govern- 
ing and  controlling  power  vested  in  them  by  the  Con- 
stitution may  think  necessary  and  exiiedient.'^ 

Continuing  the  court  said : 

‘This  power  legitimately  exercised  could  never  be 
limited  by  contract  nor  bartered  away  by  legislation.’’ 

The  majority  opinion  in  the  case  of  Locliner  v.  New 
Yorl',  198  U.  S.  45  refers  to  Holden  i\  Hardy  as  one  of  the 
cases  wherein  the  court  has  treated  the  police  powers  with 
liberal  construction,  but  the  Locliner  case  although  holding 
against  the  validity  of  that  law  admits  tbe  rule  to  be  that 
both  property  and  liberty  are  held  on  such  reasonable  con- 
ditions as  may  be  imposed  by  the  governing  power  of  the 
state  in  the  exercise  of  those  (police)  powers,  and  with 
such  conditions  the  Fourteenth  Amendment  was  not  de- 


142 


signed  to  interfere,  and  later  on  in  the  opinion  said: 

^^The  state,  tlierefore,  lias  power  to  prevent  tlie  in- 
dividual from  making  certain  kinds  of  contracts,  and 
in  regard  to  them  tlie  federal  Constitution  offers  no 
protection.’’ 

The  reasonable  control  of  moral  conduct,  liealth  provis- 
ions and  bodily  protection  have  always  been  conceded  to 
stand  above  individual  rights  of  conduct.  Organized  so- 
ciety is  charged  witli  general  security  and  ])rotection.  It 
must  use  good  judgment  to  ascertain  the  necessities  and 
execute  the  remedies.  The  individual  just  act  iu  subser- 
vience to  this  protection  and  within  tliis  judgment,  if  such 
it  be  as  distinguished  from  arbitrary  action.  The  state 
may  provide  the  remedy. 

Indeed  in  Holden  v.  Hard]/  tlie  court  said: 

‘These  em])loyments  when  too  long  pursued  the  leg- 
islature has  judged  to  be  detrimental  to  the  health  of 
the  employes,  and  so  long  as  there  are  reasonable 
gTOunds  for  believing  that  this  is  so,  its  decision  upon 
this  subject  cannot  be  reviewed  by  the  federal  courts.” 

At  page  57  the  court  said : 

“This  is  not  a question  of  substituting  the  judg- 
ment of  the  court  for  that  of  the  legislature.  If  the 
act  be  within  the  power  of  the  state  it  is  valid  although 
the  judgment  of  the  court  might  be  totally  opposed  to 
the  enactment  of  such  a law,  but  the  question  would 
still  remain : Is  it  within  the  police  power  of  the 

state,  and  that  question  must  be  answered  by  the 
court.” 

See  cases  under  subdivision — herein,  holding  that  prop- 
erty is  held  subject  to  the  resumption  of  this  right. 

A thief  is  not  immune  from  restraint  by  the  bill  of  rights, 
the  sufferer  from  a contagious  disease  cannot  go  unre- 
strained to  pursue  his  individual  happiness  or  liberty;  the 
murderer  cannot  go  unpunished  because  his  body  would 


143 


be  hurt  execution,  and  tliey  can  only  claim  due  j)rocess 
of  law.  It  is  true  that  tlie  thon^litless  employer  and  em- 
ployee would  dislike  to  be  restrained  for  llie  ‘•eiieral  j^ood 
but  he  who  sutfers  from  contagious  disease  is  ecpially  free 
from  fault,  yet  ecpially  dangerous  in  action.  In  the  inter- 
ests of  the  public  he  must  be  restrained  or  limited  in  his 
liberty  and  individual  rights.  The  rights  of  his  property- 
are  thereby  invaded  but  only  to  the  extent  that  the  state 
determines  necessary  in  the  interests  of  public  health.  We 
might  drive  men  to  war  for  the  public  good;  we  might  re- 
strain them  from  leaving  the  state  or  tlie  government  in 
times  of  war;  the  right  of  liabeas  corpus  might  be  sus- 
pended in  time  of  war;  military  systems  may  be  substi- 
tuted for  civil  authorities  in  time  of  war.  All  these  things 
are  unusual  restraints  upon  individual  liberty  and  civil 
rights  but  they  are  done,  they  are  upheld,  and  necessarily 
must  be  so  when  proper  circumstances  arise  for  the  pro- 
tection of  the  public  good.  This  must  remain  so  long  as 
the  government  is  able  to  preserve  its  own  existence.  It  is 
upon  this  theory  that  the  court  is  able  to  protect  and  pre- 
serve this  power,  and  to  hold  as  it  did  in  MuUcr  v.  Oregon, 
208  U.  S.  412,  L.  Ed.  551,  that  while  the  liberty  of  contract 
is  a property  right  of  the  individual 

‘A>t  it  is  equally  well  settled  that  this  liberty  is  not 
absolute  and  extending  to  all  contracts,  and  that  a 
state  may  without  conflicting  with  the  provisions  of 
the  Fourteenth  Amendment  restrict  in  many  respects 
the  individuars  power  of  contract.’’ 

With  respect  to  fees  it  was  said  in  the  case  of  McLean 
V.  Denver  k Rio  Grande  Ry.,  203  U.  S.  39,  L.  Ed.  78: 

^The  exercise  of  the  police  power  may  and  should 
have  reference  to  the  peculiar  situation  and  needs  of 
the  community.” 


144 


And  again : 

‘^The  law  being  otherwise  valid,  the  amount  of  the 
inspection  fees  is  not  a judicial  question;  it  rests  with 
the  legislature  to  fix  the  amount  and  it  can  only  pre- 
sent a valid  objection  when  it  is  so  unreasonable  and 
disproportionate  to  the  services  rendered  as  to  attack 
the  good  faith  of  the  law.” 

In  the  case  of  Consolidated  Coal  Co?v.  Illinois,  185  U.  S. 
202,  L.  Ed.  872,  the  court  held  that  where  the  legislature 
paid  an  inspector  his  own  fees  q,nd  then  allowed  him  to  de- 
termine the  number  of  times  he  should  examine  miles  on  a 
sliding  scale,  the  money  to  be  turned  over  by  him  to  the 
treasurer,  the  law  was  not  objectionable,  saying: 

‘^We  know  of^no  reason  why  the  legislature  should 
deprive  itself  of  the  best  obtainable  evidence  of  the 
facts  it  seeks  to  make  determinative  of  these  two  ques- 
tions.” 

In  the  case  of  State  v.  Smith,  58  !Minn.  35,  in  requiring 
the  Street  Eailway  Company  to  protect  its  motormen,  the 
court  said : 

^‘It  has  never  been  questioned  that  tlie  police  power 
of  the  state  extends  to  regulating  the  use  of  dangerous 
machinery,  with  a view  to  protecting,  not  only  others, 
but  those  who  are  employed  to  use  it.” 


d. 

Police  Poieer  can  'X either  he  Legislated  nor  Contracted 

Atcaij. 

There  is  another  line  of  cases  which  clearly  shows  the 
extent  of  the  police  power,  and  that  is  the  line  which  viti- 
ates contracts,  made,  or  which  subsequently  become  con- 
trary to  the  police  power.  There  is  no  vested  interest  based 
on  such  contract  safe  against  it. 


145 


In  ^tone  v.  Mississippi,  101  U.  S.  814,  L.  Kd.  1070-80-81, 
in  the  lottery  case  where  the  lej’  islatiire  liad  granted  a char- 
ter to  a company  for  25  years  in  consideration  of  a certain 
sum  in  casli  and  a subsecinent  constitutional  ])rovision  was 
adopted  declaring  tliat  tlie  legislature  should  nex'er  author- 
ize any  lottery  or  the  sale  of  lotterj^  tickets,  etc.,  the  court 
said : 

^^All  agree  that  the  Legislature  cannot  bargain 
away  the  police  j)ower  of  the  state.  ‘Irrevocable 
grants  of  property  and  franchises  may  be  made  if  they 
do  not  impair  the  supreme  authority  to  make  laws  for 
the  right  government  of  the  State;  but  no  legislature 
can  curtail  the  power  of  its  successors  to  make  such 
laws  as  they  may  deem  proper  in  matters  of  police.’ 
Metropolitan  Board  of  Ea-cise  r.  Barrie,  34  N.  Y.  657; 
Boyd  V.  Alabama,  94  U.  S.  645.” 


And  again: 

“But  the  power  of  governing  is  a trust  committed 
by  the  People  to  tlie  government,  no  part  of  which  can 
be  granted  away.  The  People,  in  their  sovereign  ca- 
pacity, have  established  their  agencies  for  the  preser- 
vation of  the  public  health  and  the  public  morals,  and 
the  protection  of  public  and  private  rights.  These 
several  agencies  can  govern  according  to  their  discre- 
tion, if  within  the  scope  of  their  general  authority, 
while  in  power,  but  the,y  cannot  give  away  nor  sell 
the  discretion  of  those  that  are  to  come  after  them,  in 
respect  to  matters  the  government  of  which,  from  the 
very  nature  of  things,  must  ‘vary  with  varying  cirenm- 
stances.’  They  may  create  corporations,  and  give 
them,  so  to  speak,  a limited  citizenship;  but  as  citi- 
zens, limited  in  their  privileges,  or  otherwise,  these 
creatures  of  the  government  creation  are  subject  to 
isuch  rules  and  regulations  as  may  from  time  to  time 
be  ordained  and  established  for  the  preservation  of 
health  and  morality. 

“The  contracts  which  the  Constitution  protects,  are 
those  that  relate  to  propertv  rights,  not  governmen- 
tal.” 


146 


If  Ave  recognize  this  principle  the  supposed  constitution- 
al objections  fade  away. 

In  N.  P.  Ry.  Co.  v.  Duluth^  98  Minn.  429,  a street  had 
been  laid  out  after  the  railway  was  built;  afterwards  a via- 
duct became  necessary;  the  city  of  Duluth  demanded  that 
the  Ry.  Co.  construct  and  maintain  that  viaduct;  the  com- 
pany denied  its  liability  so  to  do;  a compromise  was 
reached  by  Avhich  tlie  Railway  Company  paid  |50,000  to- 
ward tlie  expenses,  the  city  |23,0()0,  and  tlie  city  agreed 
to  maintain  it  forever. 

The  structure  got  out  of  repair  and  the  city  repudiated 
its  contract  and  demanded  of  the  Railway  Company  that 
it  bear  the  expense.  The  Supreme  Court  of  ^linnesota  sus- 
tained tlie  right  of  the  city  so  to  do. 

A like  case,  more  elaborated,  discussed  in  the  court  be- 
low Avas  that  of  State  ex  rcl  City  of  Minncapolh  v.  G.  N. 
Ry.  Co.y  98  Minn.  380.  In  the  latter  case  it  Avas  said: 

^^It  involves  an  exercise  of  the  police  poAver,  and  the 
inquiry  is  Avhetlier  such  a requirement  is  a proper  ex- 
ercise of  that  poAver.  It  is  unnecessary  to  enter  into 
an  extended  discussion  to  sIioav  the  extent  to  Avhich 
the  legislature  may  go  in  tlie  exercise  of  this  gOA^erm 
mental  prerogath^e.  The  property,  rights,  and  liber- 
ty of  the  citizen  are  to  be  enjoyed  in  subordination- 
to  the  general  public  AA^elfare,  and  all  reasonable  regu- 
lations for  the  preseiwation  and  promotion  thereof 
are  uniformly  sustained  by  the  courts.  ‘Rights  of 
property,  like  all  other  social  and  conventional  rights 
are  subject  to  such  reasonable  limitations  in  their  en- 
joyment as  shall  prevent  them  from  being  injurious, 
and  to  such  reasonable  restraint  and  regulations,  es- 
tablished by  law,  as  the  legislature,  under  the  govern- 
ing and  controlling  pov/er  A^ested  in  them  by  the  con- 
stitution, may  think  necessary  and  expedient.’  * * * 

. “The  reasonable  limits  of  the  exercise  of  the  power 
are  not  readily  defined,  but  generally  speaking  it  ex- 
tends to  all  matters  where  the  general  public  welfare. 


147 


morals,  and  healtli  of  the  comimiiiily  are  involved. 
Bntlcr  V.  (Jhamhcrs,  30  Minn.  01),  30  N.  W.  30S." 

-State  c.v  rcl  Citij  of  Minneapolis  v.  (1.  S.  By.,  98 
Minn.  380-389. 

In  requoting  from  a Wisconsin  decision  as  to  the  in- 
creased tendency  to  require  railways  to  protect  their  cross- 
ings, the  Minnesota  court  said: 

‘It  needs  no  extension  of  well  settled  jiriuciples  to 
reach  this  conclusion.  lUit  if  it  did,  the  increase  of 
railroad  operations,  the  growth  of  population  and  so- 
cial and  business  activities,  with  conse(iuent  increas- 
ing dangers  to  persons  and  i)i*o])erty,  might  reasonably 
warrant  the  extension.  This  tendency  of  modern  de- 
velopment is  in  the  direction  of  greater,  rather  than 
more  restricted,  use  of  police  power,  and  necessarily 
so  in  order  to  meet  the  new  dangers,  and  increase  of 
old  dangers,  constantly  occurring  as  natural  incidents 
of  advancing  civilization.’  ” 

State  ex  rcl  City  of  Minneapolis  v.  G.  N.  Ry.  Co., 
98  Minn.  380-92. 

In  the  Duluth  case  the  Minnesota  court  said : 

“Of  course,  contracts  with  municipalities  ought  to 
be  enforced  as  contracts  between  individuals  are  en- 
forced, but  the  authorities  are  uniform  that  a munici- 
pal corporation  cannot  contract  away  the  right  of  the 
public  to  enforce  proper  police  regulations.  All  at- 
tempts to  do  so  have  been  held  void  by  the  courts.” 
State  ex  rcl  City  of  Duluth  v.  N.  P.  Ry.  Co-,  98 
Minn.  429-432. 

These  decisions  were  vigorously  fought  by  the  railways 
and  without  avail  before  the  Supreme  Court  of  the  United 
States. 

The  case  of  N.  P.  v.  Duluth,  208  U.  S.  583  (L.  Ed.  630), 
was  decided  the  same  day  as  the  Muller  case,  and  the 
Virginia  Club  case. 

The  court  in  the  N.  P.  case  said : 


148 


^‘But  tlie  exercise  of  the  police  power  cannot  be 
limited  by  contract  for  reasons  of  public  policy;  nor 
can  it  be  destroyed  by  compromise;  and  it  is  imma- 
terial upon  what  consideration  the  contracts  rest,  as 
it  is  beyond  the  authority  of  tlie  state  or  the  munici- 
pality to  abrogate  this  power  so  necessary  to  the  public 
safety.’’ 

N.  P.  Ry.  Co.  V.  ^tate  cx  rcl  City  of  Duluth,  208 
U.  S.  581  (L.  Ed.  G30-7). 

The  Virginia  case  is  reported  as  Cosmopolitan  Club  v. 
Commonivealih  of  Virginia,  208  U.  S.  378  (L.  Ed.  53G). 

In  that  case  the  state  had  granted  a charter  to  the  Club. 
The  charter  gave  tlie  Club  tlie  power  to  sell  liquor.  The 
state  subsequently  passed  a law  prohibiting  the  sale  of 
liquor  by  clubs  and  providing  that  their  charters  might 
be  revoked  therefor.  The  Club's  Charter  was  revoked  by 
the  courts  of  Virginia  under  that  subsequent  law.  The 
Club,  of  course,  claimed  it  was  against  its  contract  rights 
contained  in  its  charter  from  the  state.  The  Supreme 
Court  assumed  that  the  charter  contained  a contract,  but 
said : 

^‘Tt  would  be  extraordinary  if  the  legislative  depart- 
ment of  a government  charged  with  a duty  of  enacting 
such  laws  as  may  promote  the  health,  the  morals,  and 
the  prosperity  of  the  people,  might  not,  when  unre- 
strained by  constitutional  limitations  upon  its  au- 
thority, provide,  by  reasonable  regulations,  against 
the  misuse  of  special  corporate  privileges  which  it  lias 
granted,  and  which  could  not  except  by  its  sanction, 
express  or  implied,  have  been  exercised  at  all.” 

Cosmopolitan  Club  v.  Virginia,  208  U.  S.  37G  (L. 
Ed.  53G-39). 

The^  state  has  the  authority  to  compel  an  employer  to 
pay  up  his  employe  without  delay  when  a discharge  is 
made. 

In  dangerous  employment  it  can  make  the  employer 


149 

stand  tlie  expense  of  insiieetion ; it  can  limit  tin*  Iionrs  of 
labor;  it  can  require  safety  aj)i)liances ; it  can  coni])(d  the 
employer  to  pay  tlie  wa.2:es  in  money  instead  of  ^oods  at  a 
profit;  it  can  penalize  tlie  failure  to  furnish  "ood  machinery 
or  guard  its  dangers;  it  can  remove  the  defense  of  contrib- 
utory negligence;  it  may  increase  the  duties  if  not  arbi- 
trarily done.  AVhy  can  it  not  change  the  theory  of  duty 
and  recovery  when  the  ]mblic  safety  and  secin-ily  demand 
it,  acting  reasonably  and  not  arbitrarily? 

IX. 

IT  /S  T/Ii:x  IMPLY  .1  QUUSTfOK  FIRST  OF 
W JIFTIIFR  AX  ACT  IS  WITH IX  THE  POLICE  POW- 
ER OR  WHETHER  IT  IS  AX  ARPITRARY  ACTION; 

IF  THE  FORMER,  THE  COXSTITUTIOX  MUST 
HEXI)  TO  IT:  IF  NOT,  THEX  XOT. 

It  does  not  seem  to  be  very  material  whether  the  require- 
ments be  positive  or  negative  except  in  the  means  of  en- 
forcement; if  a business  becomes  so  dangerous  as  to  need 
regulation  the  state  can  regulate  it  by  requiring  a reason- 
able compliance  to  prevent,  or  a reasonable  compensation 
for  the  results. 

X. 

THE,  ACTION  OF  THE  STATE  MUST  NOT  BE  AR- 
BITRARY. 

(a)  The  common  law  was  not  made  to  meet  the  present 
conditions  and  is  totally  inadequate. 

(b)  The  law  has  not  kept  apace  with  industry. 

(c)  The  employe  carries  this  risk  now. 

! 

i 


150 


(d)  It  is  a great  temptation  to  perjurj^,  on  both  sides. 

(e)  The  employer  not  satisfied. 

(f)  It  is  unsatisfactory  to  the  public. 

State  action  must  not  he  arbitrary  hut  reasonable. 

No  one  can  read  the  foregoing  precedents  in  full  without 
concluding  that  the  question  of  what  is  dangerous  to  the 
community  is  first  for  the  legislature,  if  it  acts  within  all 
otlier  constitutional  limits  the  hinds  the  courts  unless  it’ 
uses  tlie  police  power  as  a mere  cloak  for  arbitrary  action. 

Holden  v.  Hardy,  1G9  U.  S.  306. 

Loelcnei'  v.  New  York,  198  U.  S.  45. 

Muller  V.  Oregon,  208  U.  S.  412. 

Would  a icorkmcn’s  compensation  act  changing  the  pres- 
ent theory  of  liability  from  that  of  negligence  or  fault  of 
the  employer  to  that  of  a risk  of  the  industry  or  industrial 
insurance  be  a reasonable  or  an  arbitrary  legislative  act? 

In  the  opinion  of  the  writer  such  a change  would  be  rea- 
sonable. 


a. 

The  Present  System. 

The  theory  of  recovery,  at  the  present  time,  at  common 
law,  is,  generally  speaking  that  the  employer  has  done, 
or  left  undone,  something  for  which  he  is  at  legal  fault. 
A duty  imposed  by  law  in  favor  of  the  employe  or  the  gen- 
eral public  including  him,  a violation  of  that  duty,  and  an 
injury  as  a result  without  any  intervening  efficient  cause 
must  all  concur.  The  employe,  upon  the  other  hand,' must 
have  violated  no  duty,  assumed  no  risk,  committed  no  neg- 


151 


ligence  contributing  to  the  accident,  and  the  injury  must 
not  result  from  tlie  act  of  a fellow-servant. 

This  last  feature  has  been  in  a measure  modified  with 
respect  to  certain  kinds  of  industries,  such  as  railroading, 
by  statute;  it  has  in  some  instances  been  relieved  by  judici- 
al interpretation;  and  all  obstacles  to  the  plaintilf  have 
frequently  been  enhanced  at  the  hands  of  courts  and  more 
often  lessened  by  the  hands  of  juries. 

Probably  the  present  justification  of  the*  civil  jur^  sys- 
tem is  partially  due  to  its  tendency  to  apply  rules  of  hu- 
manity rather  than  those  of  logic  or  law;  but  courts  some- 
times withhold  cases  of  doubtful  liability  from  the  jury, 
that  logic  and  law  may  counter-balance  the  ^‘over  humanity 
of  jurors.”  There  is,  too,  in  some  courts,  at  least  a tend- 
ency to  recognize  a day  of  more  liberal  allowances  when- 
ever verdicts  are  upheld. 

Assuming  that  a reasonably  safe  place  to  work  and  com- 
petent servants  are  furnished,  the  employe  has  no  better 
right  to  recover  for  injuries  due  to  the  course  of  employ- 
ment than  has  a stranger  who  is  not  a trespasser.  Indeed 
the  employer  may  owe  a much  higher  duty  to  some  others, 
like  passengers.  He  may  owe  a less  duty  to  the  employe 
where  the  work  is  assumed  with  knowledge  of  the  danger- 
ous employment  or  in  case  of  negligence  of  a fellow  ser- 
vant. 

Indeed  this  disadvantage  is  so  great  in  favor  of  employes 
that  where  a statute  was  passed  in  the  state  of  Pennsyl- 
vania relieving  the  railroad  companies  of  liability,  in  cases 
where  employes  could  not  recover,  it  took  a decision  of  the 
Supreme  Court  of  the  U.  S.  to  uphold  that  statute. 

The  lines  of  law  are  often  closely,  and  not  always  un- 
fairly drawn,  the  results  uncertain  and  expensive  to  both 
sides  and  attendant  with  much  vexations  delay. 


152 


Origin  of  the  System. 

It  is  not'to  be  wondered  that  the  present  system  is  found 
to  be  inadequate  to  the  present  exigencies.  Perhaps  more 
than  in  any  other  line  of  private  law  the  conditions  of  so- 
ciety have  outgrown  the  peculiar  growth  of  the  common 
law  except  as  it  has  been  replaced  by  judicial  interpreta- 
tion and  legislative  acts  covering  peculiar  elements. 

It  has  been  the  liistory  of  law,  generally  speaking,  that  it 
has  three  great  epochs: 

First.  The  common  law  of.  custom,  based  upon  the  ob- 
servance of  certain  general  rules  and  customs  of  conduct 
so  long  that  ^The  mind  of  man  runneth  not  to  the  con- 
trary.” 

Second. ' The  equity  of  conscience — the  theory  by  which 
the  rigid  rules  of  the  common  law  are  blended  and  ob- 
structed to  respectively  meet  the  peculiar  complex  condi- 
tions of  a growing  society.  Betv/een  the  basis  of  a common 
law  and  the  system  of  equity,  there  is  theoretically  no  gap. 
The  system  of  equity  begins  ahead  of  the  end  of  the  com- 
mon law;  it  obstructs  its  rigid  features,  blends  its  harsh 
rules,  adds  to  its  deficiencies,  yet  theoretically  it  follows 
the  law  and  does  not  pretend  to  supersede  it  in  theory  up- 
on a subject  like  this  usually  left  to  law  remedies.  Each 
of  these  processes,  in  the  course  of  government,  is  largely 
declared  and  enforced  by  judicial  decision  and  interpreta- 
tion. This  is  essentially  a slow  growth,  not  only  unsatis- 
factory .but  inadequate  to  meet  the  rapid  tendencies  of  a 
modernized  society. 

Third.  The.  science  of  legislation,  with  varying  import- 
ance has  followed  in  all  the  great  systems  of  law,  to  meet 


153 


the  growing  conditions  for  wliicli  the  other  two  ejiochs 
have  proven  inadequate. 

Tliis  was  the  case,  evidently,  under  the  I Uiby Ionian  and 
Ass}n*iau  laws;  it  has  been  the  case  in  China;  it  was  the 
case  in  Koine  and  England,  and  it  is  the  case  in  America. 

The  question,  therefore,  with  respect  to  the  form  of  de- 
velopment of  any  line  of  the  law,  is  simjily  to  what  epoch 
has  it  arrived.  If  the  common  law  and  eiinity  system  lias 
become  inadequate,  has  it  only  reached  a stage  needing 
slight  moditication  of  the  old  theory,  or  is  it  so  unfitted  as 
to  need  scientific  treatment  of  the  old  system  or  an  estab- 
lishment of  a new?  In  this  matter  the  (jiiestion  really  is: 
Are  the  legal  remedies  insnllicient? 

The  eominon  Jaw  was  not  made  to  meet  present  condi- 
tions and  is  conseqncnthj  hniJt  on  an  insufficient  theory. 

Under  the  Assyrian  monarchies,  the  Babylonian  laws, 
and  the  other  early  Asiatic  and  European  governments,  the 
conditions  were  peculiar.  Six  centuries  before  Christ,  Xe- 
buchadnezzar  built  a canal  400  miles  in  length,  of  large 
size;  in  fact,  practically  three  times  as  great  as  the  pres- 
ent Panama  ditch  that  has  so  baffled  this  great  country  for 
a generation.  But  this  canal  is  supposed  to  have  been  built 
by  the  labor  of  slaves  caught  in  successful  battles  in  ad- 
joining monarchies.  See  Rated insoids  Monarchies,  pp.  245- 
7.  He  likewise  built  the  Wall  of  Babylon  containing  500,- 
000,000  feet  of  solid  matter. 

Under  such  a system  no  compensatory  act  such  as  we 
are  now  discussing  was  necessary;  hence  we  find  none  in 
the  laws  of  that  age — although  we  do  find  some  matters  of 
negligence  treated,  such  as  malpractice  of  dentists  and 
physicians.  With  a slave,  of  course,  the  loss  of  his  life  or  the 


154 


incapacity  of  his  body  for  service  meant  economic  loss  to 
the  owner.  The  care  of  the  slave  fell  upon  the  owner,  and 
it  was  to  his  interest  to  procure  the  best  medical  aid  and 
attention  obtainable  and  to  shorten  the  incapacity  as  much 
as  skill  could  tlien  do.  The  humanitarian  feeling  was  not 
even  tlien  totally  wanting. 

Tliere  was  tlierefore  no  necessity  for  an  act  permitting 
the  injured  to  recover  damages. eitlier  for  his  medical  at- 
tention or  the  loss  of  liis  time,  and  he  needed  very  little 
money  to  pay  for  pain  and  suffering,  as  it  was  not  then 
regarded  of  such  great  importance,  even  if  he  had  had  the 
standing  of  a man  in  court. 

Wlien  we  come  to  Rome,  we  find  tliat  there  are  consider- 
able provisions  in  its  elaborate  and  highly  perfected  sys- 
tem of  private  law  tliat  gave  to  persons  injured  by  certain 
kinds  of  torts  the  right  of  recovery  and  that  degree  of  care 
varied  in  much  the  same  terms  as  to  the  relative  obliga- 
tions as  does  our  own  (Sanders  Justainian  by  Hammond, 
401-3)  ; yet  the  test  of  care  there  started  as  it  does  here 
with  the  relative  duties.  The  rules  and  degrees  of  care  as 
to  property,  sucli  as  bailments,  etc.,  were  not  far  different 
from  ours  except  that, 

^Tn  each  case  the  standard  is  the  care  which  the 
person  sought  to  be  made  liable  takes  about  his  own 
things”  (Ib.  402). 

as  distinguished  from  our  rule  of  the  standard  of  an  or- 
dinarily prudent  man;  and  domestic  relations  were  built 
upon  the  theory  of  inequality  before  the  law  which  was 
characteristic  of  their  institutions. 

Now  slavery  in  those  days  was  considered  a favor  to  the 
slave  upon  the  theory  that, 

^^Generals  order  their  captives  to  be  sold  and  thus 
preserve  them,  and  do  not  put  them  to  death”  (Ib. 
77). 


155 


In  the  coiiiineiils  on  tlie  rights  of  persons  on  jmge  TO,  tlie 
same  author  says : 

‘‘Each  i)erson  cai)ahle  of  having  and  l>eing  siil)ject 
to  riglits  was  called  in  Konian  T.aw  a persona.  Thus 
not  only  was  the  individual  citizen,  when  looked  at  as 

' having  this_capacity,  a persona,  hut  also  corporations 
and  i)ul)lic  bodies.  Slaves,  on  the  conlrary,  were  not 
persona.  They  had  no  rights.” 

Under  the  Roman  law,  the  paterfa iniUas  existed  ; and  un- . 
der  that  the  head  of  the  family  harhfmed  nr)t  only  his  di- 
rect family  but  such  of  the  c()llatoral  kindred  as  came  un- 
der his  jurisdiction  and  all  of  the  servants  and  slaves  oi 
his  household.  For  a considerable  time  he  held  the  ])ower 
of  life  and  death  over  all  of  them.  The  loss  of  service,  the 
expenses  of  treatment,  the  reduction  in  the  economic  value 
of  his  slave,  all  fell  upon  him  and  his  decendants.  There 
was  then  very  little  nse  for  a eompensatory  act. 

Besides  by  Sec.  1,  Title  VIII  (Hammond,  p.  90),  the 
Institutes  provided  : 

“Slaves  are  in  the  power  of  masters,  a power  de- 
rived from  the  law  of  nations,  for  among  all  nations 
it  may  be  remarked  that  masters  have  the  power  of 
life  and  death  over  the  slaves,  and  that  everything  ac- 
quired by  the  slave  is  acquired  for  the  master.” 

This  being  then  the  law  of  nations  the  slave  had  no  legal 
status  and  with  him  free  labor  could  neither  compete  nor 
from  his  hardships  rise. 

When  the  private  system  of  Roman  law  was  measurably 
transferred  into  Europe  and  modified  into  the  English  com- 
mon law  and  equity  systems,  the  slavery  still  partially  ex- 
isted and  there  was  added  to  it  the  modified  element  of  mili- 
tary tenure.  In  the  course  of  the  operation  of  that  system 
the  loss,  the  expense,  and  in  a measure  the  sympathy  of  the 
then  lord  was  relatively  selfish,  and  it  was  consequently 


156 


the  motive  for  him  to  see  that  the  best  care  and  attention 
should  be  given  to  replace  the  cog  in  the  wheel  of  his  sys- 
tem. With  the  fading  of  those  systems  the  growth  of 
equality  before  the  law  has  been  slow.  So  we  find  no  law 
in  England,  in  the  early  day,  of  the  nature  we  are  here 
seeking  to  adopt. 

The  English  common  law  system  theoretically  was  trans- 
ferred to  America  as  one  of  England's  dependencies;  and, 
aside  from  a small  section  which  adopted  the  theory  of  the 
Roman  Civil  Law — like  Louisiana — the  great  body  of  the 
private  common  law  of  England,  including  its  statutes 
then  in  existence,  was  adopted  as  the  common  law  of  this 
country;  so  far  as  it  was  not  inconsistent  with  our  consti- 
tutional systems  or  law. 

The  South  had  its  slavery,  attendant  with  the  commer- 
cial instincts  of  the  owners,  which  there,  as  in  Europe,  in- 
stigated all  necessary  attention  to  the  injured  when  acci- 
dents did  occur.  And  the  South  was  slow  in  manufacture; 
it  was  an  agricultural  community;  it  had  few  dangerous 
pieces  of  machinery — and  it  needed  no  such  law. 

Strange  as  it  now  seems,  the  theory  that  the  slave  was 
not  a person  in  law  was  not  confined  alone  to  Europe.  In 
the  famous  Dred  Scott  decision.  Chief  Justice  Taney  of 
the  Supreme  Court  of  the  U.  S.,  speaking  for  the  majority 
of  that  great  court  said : 

‘Jt  is  difficult  at  this  day  to  realize  the  state  of 
public  opinion  in  relation  to  that  unfortunate  race, 
which  prevailed  in  the  civilized  and  enlightened  por- 
tions of  the  world  at  the  time  of  the  Declaration  of  In- 
dependence, and  when  the  Constitution  of  the  United 
States  was  framed  and  adopted.  But  the  public  his- 
tory of  every  European  nation  displays  it,  in  a manner 
too  plain  to  be  mistaken.  ' . 

^^They  had  for  more  than  a century  before  been  re- 
garded as  beings  of  an  inferior  order;  and  altogether' 


157 


unfit  to  associate  with  tlie  wliite  race,  eitlier  in  sf>cial 
or  political  relations;  and  so  far  inferior,  tliat  tliey 
had  no  rights  which  tlie  white  man  was  bound  to  re- 
spect.’^ 

Drcd  Scott  V.  Sanford,  GO  U.  S.  393  (L.  Ed.  G91- 
701). 

This  expression  evidently  intended  to  fix,  and,  being 
seized  upon  to  establish,  the  want  of  legal  status  served  as 
an  awakening  to  the  realization  of  a great  fact,  whicli  a 
bare  majority  then  decided  to,  and  did,  change. 

It  was,  of  course,  the  fact  in  the  South  as  it  liad  been 
in  Europe  that  so  long  as  men  could  be  bouglit  to  work, 
there  were  few  economic  reasons  to  favor  them  with  com- 
pensatory laws.  Likewise  free  labor  could  not  well  ele- 
vate itself  while  competing  with  actual  slavery  or  its  ef- 
fects. 

In  the  New  England  and  the  Eastern  states,  indeed  in 
all  of  America  outside  of  the  slave  belt,  scientific  labor  was 
in  a state  of  slumbering  indolence  ready  to  awaken  a com- 
mercial revolution,  when  the  shackles  of  competing  sec- 
tions should  fade  away.  Until  that  time  men  hardly  la- 
bored as  a system  of  scientific  specialists  in  America  al- 
though mu-ch  of  their  arts  and  crafts  are  wonders  of  this 
age.  Equality  of  politics  and  equality  before  the  law  had 
greatly  impressed  itself  upon  society  in  all  its  tendencies. 
The  old  neighbor  worked  for  him  who  proved  to  be  more 
frugal,  making  complete  articles  of  commerce,  like  shoes, 
or  wagons,  or  furniture.  Their  families  were  friends ; their 
children  oftentimes  intermarried;  the  home  of  each  was 
permanent. 

An  accident  to  the  workmen  was  infrequent,  as  there 
was  little  machinery  and  plenty  of  time.  The  accident, 
when  it  did  occur,  was  an  injury  to  the  community,  in 


158 


sympathy,  at  least,  and  the  old  neighbors  shared  the  con- 
sequences of  the  resultant  needs  of  the  injured  and  his 
family — and  no  such  legislation  was  then  necessary. 

Best  Thought  of  Age  Devoted  to  Government. 

In  the  epoch  which  followed  the  settlement  of  America 
and  that  which  preceded  and  endured  thd*  Revolutionary 
war,  patriotism,  based  upon  the  compact  theory — equality 
before  the  law  for  freemen — was  the  guiding  motive  in 
forming  our  constitution. 

The  best  thouglit  of  the  best  minds  of  this  new  and  am- 
bitious country  was  devoted  to  the  essential  features  of 
both  private  and  public  law,  to  create  a model  s^'Stem  up- 
on the  theory  of  a republic;  no  otlier  feeling  than  the  pres- 
sure of  hardsliip  could  have  been  the  motive  to  drive  men 
to  such  deeds  of  patriotism  or  such  deep  lines  of  thought 
along  governmental  lines. 

They  studied  all  of  the  then-recorded  systems^  of  govern- 
ment. They  argued,  analyzed  and  decided  the  best#  prin- 
ciples for  their  conditions  that  thej^  could,  from  the  whole 
of  the  several  systems. 

The  great  arguments  of  Webster  and  Wirt,  and  the  al- 
most superhuman  decisions  of  Marshall,  had  greatly  ex- 
tended and  blended  the  constitution  to  meet  the  several 
conditions  as  they  had  arisen. 

The  spirit  of  enthusiasm  from  the  building  of  that  great 
work  but  partially  subsided  until  the  passage  of  the  Civil 
war — which  confirmed  the  instrument  as  a system  of  cen- 
tralized power. 

Then  came  the  amendments,  with  Mr.  Justice  Miller  and 
his  associates  to  construe  the  new  constitutional  epoch,  as 
a basis  not  alone  of  defeating  slavery  but  as  an  added 
protection  to  human  rights. 


159 


b. 

Great  Minds  Tuva  to  Industries. 

From  the  time  that  the  Civil  war  ended  and  the  recon- 
struction was  done,  the  ^reat  minds  in  America  turned 
tlieir  attention  to  previousl.y  neglected  material  things. 
There  was  a vj^i^t  country,  with  great  natural  but  undevel- 
oped resources. 

The  problems  of  necessity  came  first;  agriculture  for 
food,  individual  preservation  of  foods,  personal  construc- 
tion of  raiment  were  most  necessary. 

Some  of  the  great  inventions,  now  sucli  powerful  means, 
were  wholly  unknown,  otliers,  in  their  infancy.  If  a per- 
sonal statement  can  be  excused,  my  own  father,  yet  alive 
and  in  the  possession  of  all  his  faculties,  was  five  years  of 
age  when  the  first  railroad  was  laid.  The  modern  means 
of  manufacture  and  tools  were  not  yet  at  a stage  to  be 
greatly  valued  or  seriously  dangerous. 

Th^  commercial  inventions  have  been  almost  without 
number.  - Machinery  has  become  highly  developed  and  is 
yet  increasing  in  amount  and  capacity.  The  laborer,  who 
had  been  the  old  neighbor,  making  his  complete  article, 
had  to  be  replaced  by  a machine  operated  by  a person  per- 
haps with  no  more  breadth  of  general  vision  but  with  a 
specialized  knowledge  of  that  article,  who  could  make 
many  pieces  at  a much  smaller  cost,  which,  when  put  with 
many  more  pieces,  made,  too,  at  a smaller  cost,  would  make 
the  whole  article  not  only  more  quickly  but  much  more 
cheaply. 

The  Relations  of  Employ &r  and  Employe  Change. 

/ And  with  this  necessity  the  whole  gave  way  to  the  piece 
system ; the  old  neighbor  to  the  specialist.  The  specialist 


160 


was  frequently,  indeed  quite  often,  a foreigner;  speaking 
a different  tongue,  leading  a different  life,  having  different 
sympathies,  and  producing  a different  society. 

The  owner  who  had  worked  with  the  old  neighbor  could 
no  longer  have  the  social  intercourse  with  all  his  men; 
neither  could  he  longer  work  beside  them,  but  his  talents 
must  be  put  to  financiering,  to  finding  the  best  and  cheap- 
est productions,  to  making  the  greatest  and  least  expen- 
sive sales.  To  each  department  he  must  delegate  the  duties 
formerly  an  incident  to  his  business,  to  foreman;  and  over 
them  a vice  principal ; perhaps  under  both  a ‘^strawboss’’ ; 
thus  removing  from  his  vision  and  sympathy,  and  likewise 
removing  from  their  vision  and  sympathy,  the  elements 
that  had  formerl}^  bound  the  employer  and  the  employe 
together. 

The  requisite  capital  to  run  that  business  necessitated, 
first,  the  partnership ; and  after  that,  the  combined  wealth 
and  organization  of  the  legal  corporate  entity.  These,  too, 
placed  one  further  step  between  ‘ffhe  company”  and  ^ffhe 
man.” 

Following  the  substitution  of  the  piece  for  the  whole, 
system  of  manufacture,  came  the  substitution  of  the  whole 
for  the  piece,  system  of  men.  The  union  of  all  the  men  for 
the  convenience  and  protection  of  all,  and  this  removed 
sympathy  still  one  degree  further.  The  deal  was  then 
one  of  good  labor  at  cheap  cost  against  cheap  labor  at  good 
cost — cold  blooded  business  on  each  side. 

We  were  busy  in  America  getting  the  balance  of  trade. 
We  were  engaged  in  building  up  our  cities,  opening  our 
new  railroads  (some  very  cheap  and  dangerous),  slaugh- 
tering our  forests,  devouring  our  mines,  and  last  but  not 
least,  mcreasing  our  necessities  proportionate  to  our  earn- 
ing capacities.  The  luxuries  of  yesterday  were  the  neces- 


K)1 


sities  of  today.  Machinery  lias  been  ruslied  to  its  capa- 
city, its  operators  to  their  endurance,  and  yet  tlie  demand 
has  not  been  met.  Tlie  rush  of  manufacturers  to  meet  our 
demand,  lias,,  probably  enhanced  the  dangers  of  various  em- 
ployments. 


c. 

Employe  Carries  Risks  of  Accidents  Now. 

In  the  manufacture  of  j^oods  a small  percentage  is  added 
for  labor;  another  percentage  for  rent;  another  for  inter- 
est on  the  investment;  another  for  insurance  to  carrj^  the 
fire  risk,  and,  in  recent  year^,  some  additional  to  carry  the 
risk  of  negligence  of  the  employer.  But  the  risk  of  pain 
and  suffering,  the  risk  of  incapacity,  the  risk  of  family 
deprivation,  the  loss  of  the  lahoreEs  capital,  in  so  far  as 
traceable  to  the  accidents,  in  a majority  of  the  cases,  as 
distinguished  from  the  negligence  of  the  employer,  has  been 
a risk  icliich  the  laborer  himself  has  borne. 

He  has  not  been  asked  in  the  past  to  assume  the  risk  of 
fire  insurance;  but  he  has  been  asked  to  assume  and  has 
assumed  the  risk  of  personal  injury  where  it  has  been 
caused  simply  by  the  nature  of  the  industry  without  anj 
one’s  fault;  according  to  recent  statistics  gathered  by  the 
state  of  Wisconsin  and  published  by  its  labor  department 
the  risk  of  the  injury  without  fault  has  caused  a majority 
of  accidents.  The  public  demands,  of  course,  have  made 
those  accidents  necessary.  It  may  be  that  those  demands 
have  been  stimulated  by  the  shrewd  advertising  of  the 
manufacturer;  but,  nevertheless,  such  has  been  the  case 
and  is  a part  of  our  progress. 

There  was  a time  when  a man’s  family  carried  the  risk 
of  his  death  without  property.  To  prevent  that  hardship. 


162 


life  insurance  companies  were  formed  to  carry  that  part 
cf  the  risk,  for  a consideration  paid  at  previous  intervals. 
The  question  of  whether  it  was  gambling  was  litigated  and 
settled  adversely  to  that  contention.  It  is.  now  considered 
gTeatly  beneficial  to  society  by  the  distribution  and  equali- 
zation of  the  financial  burden. 

There  was  a time  when  every  man  of  property  carried 
his  own  risk  of  fire.  His  lionie  burned,  and  his  neighbor 
donated  clothing,  beds  and  eatables.  Charity,  not  compen- 
sation, was  his  lot.  To  meet  this,  fire  insurance  conipen- 
ies  were  organized;  and,  like  life  insurance,  had  to  fight 
prejudice  and  laws.  Indeed,  there  was  a time  when  an  in- 
surance agent  in  tlie  country  fared  little  better  than  a 
“lightning-rod  agent.’’  The  state  stepped  in;  it  regulated 
the  business,  both  life  and  fire;  it  passed  laws  embracing 
forms  of  policies,  so  that  the  insured  could  not  be  promised 
all  in  the  body  with  “antidotes’’  in  the  fine  print. 

Statistics  could  be  obtained  to  fix  the  average  length  of 
life;  they  could  be  gotten  to  fix  quite  well  the  hazards  of 
fire,  consequently  private  enterprise  could  fix  the  risk 
sufiicientH  to  make  satisfactory  rates. 

In  the  great  field  of  agriculture,  exchanges  have  grown 
up  wherein'traders’  markets  are  established.  The  value  of 
those  markets  rests  largely  on  the  fundamental  commer- 
cial necessities;  that  ready  and  complete  information  as 
to  supply  and  demand  is  obtainable  by  the  traders  and  re- 
flected in  the  quotations  of  sale  prices;  that  the  traders  as- 
sume the  financial  risk  of  controlling  and  distributing  the 
surplus  to  meet  the  demand;  that  the  praducer  not  only 
gets  much  nearer  the  consumer's  price  when  he  does  sell, 
but  gets  the  benefit  of  the  best  judgment  of  the  greatest 
specialists  as  to  the  time  to  sell.  The  financial  risk  of  the 
farmer  has  thus  been  greatly  assumed  by  the  trader.  The 


1()3 

trader  insures  liis  risk  l)v  nieaiis  of  a system  of  lied'^iii;^, 
coimter-balancin<»:  llie  cliaiiees  in  liis  i)nrcliases  until  lie 
sells;  the  miller  likewise  covers  his  risk.  Tlie  states  have 
greatly  favored  tliese  institutions  with  legislation.  They 
have  made  it  possible  for  members  to  organize  an  associa- 
tion either  as  a partnership  or  as  an  organization  in  the 
nature  of  a voluntary  association,  which  is  permitted  to 
prescribe  conditions  of  membership  and  have  given  to  their 
boards  of  arbitrators,  rights  of  common  law  arbitrators 
which  give  speedy  and  satisfactory  results  greatly  to  the 
relief  of  tlie  courts  and  public.  This  greatly  simplifies  the 
expenses  and  very  much  shortens  the  delay.  Ilesides  the 
member  gets  his  case  heard  before  experts  who  think  and 
judge  as  he  would  do  if  impartial. 

In  the  field  of  general  industry  and  its  commerce  some 
such  principles  are  partially  applied  in  the  commercial  ex- 
changes, but  with  respect  to  the  risk  of  accidents,  the  par- 
ties either  settle  their  respective  risks,  or  apply  to  the  old 
methods  of  litigation. 

It  is  true  there  are  many  systems  of  insurance  which 
many  can  get  if  they  are  able  to  pay  the  cost. 

Certain  fraternal  organizations  have  benefits  some  may 
receive,  but  no  greater  than  are  ours  outside  of  labor  for 

benefits  other  than  their  peculiar  risks. 

* 

The  uncertainties,  the  expenses,  incident  thereto,  the 
great  delay,  and  many  other  reasons,  however,  make  this 
risk  so  uncertain  as  to  create  entirely  too  much  waste  in 
cost,  time,  and  feelings  as  applied  to  our  present  system. 
This  fault  of  waste  can  probably  be  said  to  be  based  large- 
ly on  the  fault  of  the  risk  that  must  now  be  assumed. 

At  the  present  time,  then,  the  risk  of  industrial  acci- 
dents, from  the  view  of  the  laborer,  is  borne  practically  by ' 
him,  except  in  so  far  as  he  shows  they  were  due  exclusive- 


164 


ly  to  a violation  of  the  employe’s  legal  duty.  Yet  the  em- 
ployer is  heavily  burdened. 

The  laborer,  who  is  a stranger,  conies  to  his  employment. 
The  interests  and  obligations  of  a master  and  a slave  do 
not  even  exist;  nor  do  those  of  the  military  system.  He 
works;  he  is  crippled,  he  leaves.  The  relation  is  then  end- 
ed— except  for  violation  of  duty  or  by  grace  of  charity.  It 
matters  very  little  to  his  family  or  those  dependent  upon 
him  whether  the  loss  of  his  arm  or  his  leg  or  the  family 
wages  upon  which  they  lived  was  occasioned  by  some  slip 
of  the  foot  negligently  allowed  to  happen,  or  a slip  of  the 
foot  unavoidably  happening  by  reason  of  the  negligence  of 
the  employer — the  public  calamity  is  the  same;  the  injury 
is  the  same;  the  results  are  the  same;  the  consequences,  to 
their  minds,  are  not  distinguishable,  nor  are  they  to  ours. 

d. 

Present  Systems  a Temptation  to  Perjury. 

A man  in  the  railway  service,  on  a dark,  snowy  night, 
knows  that  there  should  be  a light  of  a certain  color  in  a 
certain  position.  He  is  blinded  by  the  snow  and  forgets 
to  look.  The  light  turned  a different  way  is  a different 
color;  it  means  that  he  should  stop  but  he  approaches  and 
is  injured.  He  goes  to  a lawyer  who  is  honest;  and  is  ad- 
vised that  no  fault  of  the  master  existed  but  his  fault  did 
exist — he  cannot  recover.  He  goes  home  and  tosses  back 
and  forth  upon  his  bed  during  the  night,  wondering  what  . 
can  become  of  himself  and  family.  A neighbor  asks  if  he 
remembers  distinctly  which  colored  light  showed.  He  dis- 
cusses it  back  and  forth.  He  has  put  his  life  into  the  ser- 
vice of  that  company.  He  realizes  that  when  his  case 
is  put  to  the  court  he  will  be  judged  by  men  sitting  on  light 


1G5 


and  comfortable  seats,  in  a measure  unapiireciative  of  tlie 
difficulties  under  which  he  labored  that  nij^ht  and  his  case 
ruled  by  logic  and  law  as  distinguished  from  justice. 

The  necessities  tempt  him  to  go  to  another  lawyer,  and, 
knowing  the  correct  principle,  state  to  him  that  he  did 
look  for  the  light;  that  the  wrong  light  was  turned  his 
way;  that  he  approached  it  and  was  injured  through  neg- 
ligei^ce  of  the  company  and  no  fault  of  his  own.  lie  re- 
covers. To  r?cnver,  the  jury  had  to  believe  his  falsehood 
as  against  a number  of  witnesses  Avho  told  the  truth. 

He  has  a friend  injured  under  circumstance  in  fact  such 
as  he  tells  to  the  jury.  ^ 

The  friend  tells  the  truth;  a witness  against  him  lies; 
perhaps  tempted  to  prevent  a charge  against  himself  of  in- 
competence, possibly  by  reason  of  Ifis  customar}^  actions — 
but  lies — the  jury  believes  the  false  witness,  and  the  in- 
jured gets  nothing. 

The  rules  of  common  law  are  so  closely  drawn  that  the 
ringing,  or  the  failure  to  ring  a bell;  the  pulling,  or  the 
failure  to  pull  a whistle;  the  swing,  or  the  failure  to  swing 
a lamp;  may  mean  success  or  failure  in  such  suits;  its 
false  telling  may  mean  ease  or  poverty  to  the  injured. 
It  may  have  meant  life  or  death  to  the  laborer  as  well  as 
to  the  passengers.  It  may  win  for  the  defense. 

Lawyers  who  take  these  cases  on  contingent  basis  are 
generally  fair,  but  the  temptation  to  advise  as  to  these 
slight  differences  is  very  great  to  a poor  lawyer  with  a 
percentage  contract  in  a bad  injury,  easily  made  into  a case 
of  liability. 

We  must  not,  however,  say,  or  even  intimate,  that  the 
mere  trial  of  damage  suits  is,  per  se,  objectionable,  that 
all  employers  are  heartless  or  all  insurance  agents  ras- 
cals. It  would  be  extremely  unfortunate  and  unfair  to  so 


16G 


argue  it.  The  system  has  liad  its  abuses,  but  railroads  have 
had  some  watered  stock;  bank  ollicials  have  had  some  em- 
bezzlers, the  bar  has  had  some  thieves,  and  the  church  has 
harbored  some  adulterers — men  are  human. 

We  do  not  outlaw  all  railroads;  condemn  all  bankers; 
disbar  all  lawyers,  nor  excommunicate  all  churchmen. 

The  great  fact  is  that  men  of  breadth  and  judgment  con- 
demn only  the  evils  of  the  system,  ^[any  men  of  affairs  do 
little  work  on  this  subject  except  in  the  aid  of  the  defense  of 
cai)ital  and  its  accomjilisliments,  and  can  easily  reach  the 
conclusion,  based  largely  on  interest  or  bias  tliat  it  is  more 
important;  but  Avhen  we  face  the  question  from  the  stand- 
point of  just  judgment,  rather  than  the  attitude  of  ad- 
vocates, things  assume  a different  aspect. 

The  Tmploi/c  not  Efjiial  With  the  Employer  Under  the 

Co)nmo)i  Law. 

We  have  already  shown  a rex^ognized  inequaliW  of  con- 
tract but  a few  of  the  "cases  will  seiwe  to  illustrate  this 
point  also. 

Under  the  law  as  it  now  stands  in  America,  labor  and 
capital  are  equal  before  the  law  in  the  constitutional  sense, 
but  they  are  not  equal  in  the  law,  capital  conies  with  the 
shrewdness  of  a well  chosen  advocate  hired  at  the  mini- 
mum of  expense  for  his  worth,  and  the  laborer  with  whom 
he  can  get  at  the  maximum  of  expense.  The  litigation  is 
but  an  event  in  the  life  of  the  capitalist,  often  not  requir- 
ing his  personal  attendance  at  the  trial;  but  it  is  an  epoch 
in  the  life  of  the  laborer  and  his  family — they  talk  it;  they 
live  it^  they  dread  its  aAvful  uncertainties — :they  suffer  its 
great  calamities. 

The  lawyer  who  takes  the  part  of  the  laborer  in  dam- 


167 


age  cases,  often  pays  the  whole  expense;  he  earns  or  does 
not  get  his  own  fee,  and  some  support  the  laborer — we 
are  told — in  the  interim.  For  this  the  lawyer  must  be 
paid.  The  returns  being  uncertain  must  be  greater  when 
they  do  come;  hut  all  these  things  the  laborer  must  stand 
or  he  outlawed  under  our  system,  if  his  claim  is  disputed. 

In  Holden  v.  Hardy,  169  U.  S.  366,  L.  Ed.  780,  the  court 
said,  respecting  mining : 

^‘The  legislature  has  also  recognized  the  fact,  which 
the  experience  of  legislators  in  many  states  has  corro- 
borated, that  the  proprietors  of  these  establishments 
and  their  operatives  do  not  stand  upon  an  equality, 
and  that  their  interests  are,  to  a certain  extent,  con- 
flicting. The  former  naturally  desired  to  obtain  as 
much  labor  as  possible  from  their  employes,  while  the 
latter  are  often  induced  by  the  fear  of  discharge  to 
conform  to  regulations  which  their  judgment,  fairly 
exercised,  would  pronounce  to  be  datrimental  to  their 
health  or  strength.  In  other  words,  the  proprietor^ 
lay  down  the  rules  and  the  laborers  are  practically 
constrained  to  obey  them.  In  such  cases  self-interest 
is  often  an  unsafe  guide,  and  the  legislature  may 
promptly  interpose  its  authority.  * * * g^t  the 

fact  that  both  parties  are  of  full  age  and  competent 
to  contract  does  not  necessarily  deprive  the  state  of 
the  power  to  interfere  where  the  parties  do  not  stand 
upon  an  equality,  or  where  the  public  health  demands 
that  one  party  to  the  contract  shall  be  protected 
against  himself.  The  state  still  retains  an  interest 
in  his  welfare,  however  reckless  he  may  be.  The  whole 
is  no  greater  than  the  sum  of  all  the  parts,  and  when 
the  individual  health,  safety,  and  welfare  are  sacri- 
ficed  or  neglected,  the  state  must  suffer.” 

We  have  then  the  principle  announced  by  two  able 
courts,  Harhinson  v.  Knoxville  Water  Co.,  53  S.  W.  993, 
and  the  case  of  Holden  v.  Hardy,  169  U.  S.  397  (L.  Ed. 
793). 

But  in  the  case  of  Adair  v.  U.  S.,  208  U.  S.  160  (L.  Ed. 
436-442),  the  majority  said: 


r 


^ 168 

“In  all  such  particulars  the  employer  and  the  em- 
ployee have  equality  of  right,  and  any  legislation  that 
disturbs  that  equality  is  an  arbitrary  interference 
Avith  the  liberty  of  contract  Avhich  no  government  can 
legally  justify  in  a free  land.” 

Adair  v,  U.  S.,  208  U.  S.  160  (L.  Ed.  436-442). 

The  first  two  cases  Avere  where  the  employment  was  dan- 
gerous; the  last  liad  under  consideration  a different  ques- 
tion— the  relation  of  the  labor  union  to  the  employment, 
and  cannot  be  said  to  limit  the  others. 

In  the  case  of  Narramore  v.  Cleveland^  (7.,  (7.  & St.  L. 
Ry.,  96  Fed.  298  (6  C.  C.  A.),  Judge  (noAV  President) 
Taft  said : 

“The  only  ground  for  passing  such  a statute  is 
found  in  the  inequalit}^  of  terms  upon  Avhich  the  rail- 
way company  and  its  serAmnts  deal  in  regard  to  the 
dangers  of  their  employment.  The  manifest  legisla- 
tive purpose  was  to  protect  the  servant  by  positive 
laAv,  because  he  had  not  previously  shown  himself  cap- 
able of  protecting  himself  by  contract;  and  it  would 
entirely  defeat  this  purpose  thus  to  permit  the  servant 
^to  contract  the  master  ouP  .of  the  statute.” 

No  etfectiA^ely  organized  effort  controls  the  city  coun- 
cils, or  the  legislative  bodies  of  either  state  or  nation  in 
the  special  interests  of  labor,  no  aggregation  of  capital 
earns  for  it ; no  social  influence  aspires  to  it — it  is  but 
the  means  of  business  and  business  the  means  to  capital, 
whose  necessities  are  yet  its  luxuries. 


e. 

The  Employer  has  Dificulties. 

And  these  temptations  and  uncertainties  make  it  all  the 
more  difficult  for. the  employer.  Besides,  the  amount  of 
money  which  it  costs  the  employer  to  maintain  inviolate 


his  i)roi)erty  rights  as  against  sucli  accidents  is  entirelj' 
too  great  for  tlie  amount  wliicli  tlie  injured  receives.  To 
keep  from  being  mulcted  in  damages  l)v  fraudulent  cases, 
and  excessive  damages  by  honest  cases,  the  em[)ln3*er  must 
maintain  expensive  and  extended  systems  of  defence  or  in- 
surance. He  bears  such  loss  as  he  cannot  settle  or  pre- 
vent by  lawsuits  or  anticipated  insurance — from  the  fi- 
nancial standpoint,  negligence  and  (in  the  language  of 
the  street)  ^Then  some.’’  If  he  maintains  insurance,  he 
has  maiw  evile  resulting  therefrom.  lJut  this  is  not  all; 
with  the  loss  of  the  personal  contact  that  formerly  existed 
between  him  and  (he  laborer,  has  gone  the  ])ersonal  syin 
pathy.  The  laborer  joins  his  union,  and  a strike  for 
greater  Avages  is  made.  Had  mutual  feeling  is  created. 
The  laborer  is  injured;  the  employer  carries  insurance; 
the  insurance  is  based  on  legal  liability,  this  defeats  sym- 
pathy and  the  injured  feels  that  his  treatment  has  not  been 
just. 

The  great  uncertainties  of  the  risk  necessitate  much  lit- 
igation. Even  though  insured,  the  great  expense,  and 
many  uncertainties,  make  a great  nuisance  to  the  employ- 
er. The  consumer  does  not  yet  understand  that  when  buy- 
ing a product  he  should  pay  for  the  risk  of  the  man  as  well 
as  the  breakage  of  the  machinery.  It  has  been  the  theory 
that  recovery  could  only  be  had  for  fault  of  the  employer 
and  he  should  pay  for  his.  own  fault.  At  the  same  time 
the  employer  has  been  compelled  to  keep  down  the  damages 
to  compete  with  others.  Much  could  be  said  here,  hut  all 
admit  the  present  system  inadequate  for  all. 


170 


\ f. 

The  Piihlic  Burdens  Great. 

As  an  illustration  of  what  our  court  records  show  in 
Minnesota,  the  writer  turned  to  Vol.  101  Minnesota  Re- 
ports, which  covers  three  months  time,  and  found  the  fol- 
lowing result: 

Total  number  of  pages  in  whole  opinions 531 

Number  of  pages  consumed  l)v  personal  injury 

opinions  136  or 

25^%. 

Personal  injury  cases  reported 31 

Appeals  by  defendant  in  those  cases 28 


Reversals  on  same 1 

Appeals  by  plaintiff 3 

Reversals  on  same 1 


Total  number  of  verdicts  in  31  ca«es,  28  of  which  were 
affirmed,  amounting  to  flTl,926.50. 

Amount  of  those  reversed,  |6600. 

Of  the  cases  appealed,  none  of  Avhich  were  reversed.^ 
seven  aggregated  in  amount  $111,000. 

The  largest  verdict  reversed  was  for  $1,000. 

Only  three  of  the  four  cases  reversed  • were  cases  in 
which  the  verdicts  had  been  had. 

Twenty-one  of  the  cases  outside  of  the  seven  large  ver- 
dicts produced  approximately  $7,000. 

Of  the  large  verdicts  two  were  for  $6,000  each;  one 
for  $7,000 ; one  for  $10,000 ; one  for  $18,000 ; one  for 
$30,000;  one  for  $35,000.  ! 

The  case  wherein  the  $35,000  verdict  was  obtained 
' was  one  where  the  injured  died  after  the  verdict  had 
been  procured ; and  the  court  sustained  the  verdict, 
when,  under  the  statute,  it  could  only  have  sustained 


-171 


a verdict  for  $5,000  if  he  had  died  before  the  verdict 
was  rendered.  As  it  was,  lie  got  no  benefit  during 
life,  but,  by  suffering  until  after  the  verdict  was 
rendered,  contributed  an  extra  $30,000  to  his  rela- 
tives. 

Of  the  31  cases  tried,  5 were  for  injuries  not  received 
in  the  course  of  employment,  26  for  injuries  receiv- 
ed in  the  course  of  employment.  Taking  out  the 
seven  large  verdicts,  the  16  that  were  obtained  made 
but  $27,000 — which  is  not  a large  amount  on  an 
average. 

This  makes  the  remarkable  showing  that,  approximate- 
ly 84%  of  these  cases  were  for  injury  in  the  course  of  em- 
ployment. 

Considering  that  this  report  covers  but  three  months, 
and  that  perhaps  in  a majority  of  the  cases  where  no  ver- 
dict was  obtained  no  appeal  was  taken,  it  would  itself  be 
evidence  of  the  fact  that  a very  large  proportion  of  the 
cases  tried  were  personad  injurv  cases. 

We  addressed  communications  to  the  Clerk  of  the  Dis- 
trict Court  at  Duluth  and  at  Minneapolis,  as  well  as  the 
Clerk  of  the  Supreme  Court  of  Minnesota.  The  Clerk  at 
Duluth  was  the  only  one  who  gave  a definite  answer.  Three 
days’  work  of  one  of  ihis  best  deputies  produced  the  fol- 


lowing result : 

Number  of  cases  tried  during  year 369 

Number  of  them  personal  injury  cases 79 

Cost  of  running  the  court : 

Jurors’,  fees  $18,206.82 

Sheriff’s  salaries 3,087.00 

Clerks’  salaries 3,480.00 

Judges’ salaries 17,100.00 


Printing  calendars 424 . 50 

Total 142,298.32 


This,  it  will  be  seen,  makes  approximately  21  per  cent 
of  the  cases  in  number. 

The  clerk  adds,  in  his  report : 

course,  you  understand  that  there  were  prob- 
ably as  many  more  personal  injury  cases  dismissed  or 
settled,  that  never  came  to  trial.^’ 

This  probably  is  a fair  observation. 

It  might  be  added  that,  in  our  larger  cities  at  least,  cases 
of  this  nature  averaged  much  longer  than  the  ordinary  jury 
trials. 

In  our  district  court  in  Minneapolis,  it  costs  the  state  to 
try  one  of  these  cases  about  as  follows : 

Salary  of  Judge  per  annum  |5700,  esti- 
mating he  is  engaged  in  Court  200  days 


per  year,  about | 28.00 

Stenographer,  basis  200  days 9.00 

Clerk,  same  estimate 6.00  . 

Sheriff  - 6.00 

12  jurors  24.00 

6 extra  jurors  for  selection 12.00 

Sheriff’s  fees  for  serving  18  men  once  in 

12  days 3.00 

about  $3.00  per  day. 

Bailiff 3.50 

1/6  of  sheriff’s  expenses 10.00 


$101.50 

This  does  not  include  the  cost  of  building,  etc.,  etc.  It  is 
safe^  however,  to  estimate  that  each  day  of  jury  trial  in 
these  cases  costs  in  our  courts  from  $100  to  $125  and  that 


it:{ 

from  ()ne-(|uartei‘  to  ono-lialf  of  six  courts  arc  tak<*ii  iij) 
during  tlie  wliolo  year. 

Tliere  is  no  (1onl)t  but  that  a v(‘ry  lar^e  niiinb(*r  of  cases 
of  a ])crsonal  injury  nalnre  ai-e  settled  l>efore  suit  is  e\xm 
bronj^lit,  and  many  otliers  after  tlie  court  lias  jirovided  for 
or  entered  n])on  the  trial.  And  if  a system  conld  he  evolv- 
ed Avliicli  would  jirevent  th(‘  ])nhlic  exjiense  incid(*nt  to  the 
trials  that  are  had,  it  would  save  a ^^reat  deal  in  that  di- 
rection alone. 


Wisconsin. 

The  labor  report  issued  in  the  state  of  Wisconsin,  1907- 
1908,  part  1,  which  covers  ^‘Industrial  Accidents  and  Em- 
ployers’ Liability  in  Wisconsin”  contains  one  of  the  most 
interesting’  and  instructive  hits  of  information  that  we  have 
found  in  the  whole  field. 

Tlie  conditions  there  are  so  similar  to  onr  own  that  the 
information  with  respect  to  accidents  is  extremely  valua- 
ble in  a discussion  in  Minnesota. 

From  page  4 of  that  report  we  quote  as  follows; 

I 

“Responsibility  in  238  cases  investigated  by  Wisconsin 

FACTORY  INSPECTORS.  1 


' 

Mdien  the 

standard  is 

“ordinary” 

care. 

Responsibility. 

Number.  Per  cent. 

Fault  of  employer 

27 

11.35 

Fault  of  workman 

56 

23.53 

Fault  of  both 

17 

7.14 

Fault  of  fellow  servants . . . 

14 

5 . 88 

Hazard  Jof  the  industry  .... 

124 

52.10 

All  ascertained 

238 

100.00 

174 


Not  ascertained  26 

Not  at  work  for  employer 54 

Cases  investigated 318-’ 


This  gives  ns  quite  definite  information  to  show  that 
more  than  lialf  of  tlie  accidents  were  occasioned  by  the 
hazards  of  tlie  industry.  That  only  about  1/^  were  occa- 
sioned by  the  fault  of  the  employer,  and  nearly  1/4  by  the 
fault  of  the  workman  himself,  and  about  1/14  by  their 
joint  fault,  and  1/17  by  the  fault  of  fellow  servants. 

The  faults  of  the  existing  systems  are  given  on  page  5 
of  that  report,  as  follows: 


‘"Faults  of  the  existing  systems. 

1.  The  attempt  to  locate  negligence  so  that  it  will 
hold  in  a court  of  law  is  exi)ensive  and  creates  hostil- 
ity between  Avorkmen  and  employers. 

2.  The  laAV  of  negligence  means  liability  insurance 
for  the  employer,  and  a large  part  of  the  money  paid 
to  liability  insurance  companies  is  Avasted. 

3.  The  concealment  of  facts  regarding  accidents 
hinders  the  important  AAwk  of  preventing  accidents. 

4.  The  existing  Ltaa^s  do  little  to  encourage  Avork- 
men and  employers  to  enter  into  mutual  insurance 
schemes,  nor  do  they  encourage  the  workmen  to  in- 
sure themselves.  Workmen  do  not  have  adequate  pro- 
tection.’’ 


175 


XT. 

THE  COM ri:^^ STATION  IN  THE  MODERN  FOR- 
EIGN COUNTRIE^^  ALONG  THIS  LINE. 

(a)  Wliat  advaiitaj^e  has  been  made. 

(b)  The  coiniuon  law  lias  been  modified  in  many  re- 
spects and  there  seems  to  be  no  reason  Avhy  it  should  not  be 
arranged,  at  least  after  a reasonable  remedy  is  given  in  its 
stead. 

(c)  The  l^ederal  Government  and  many  of  the  states 
have  been  working  on  this  change  sufficient  to  show  that 
no  party  wants  arbitrary  action  but  only  reasonable  regu- 
lation, yet,  there  are  doubts  in  the  minds  of  many  as  to 
whether  we  can  make  the  necessary  laws. 

Compensation  in  the  Modern  Foreign  Countries. 

So  much  of  bulletin  Xo.  74,  of  the  Bureau  of  Labor  is- 
sued in  January,  1908,  by  the  U.  S.  Department  of  Com- 
merce and  Labor  as  is  covered^ on  pp.  122-169  is  represent- 
ed in  the  appendix  hereof  as  being  a splendid  brief  state- 
ment of  the  foreign  laws  on  the  question.  Page  121  com- 
ments as  follows : 


Summary  of  Foreign  Workmen’s  Compensation  Acts. 

^‘By  the  term  ^workmen’s  compensation  laws’  are 
meant  enactments  which  embody  the  principle  that  the 
workman  is  entitled  to  compensation  for  injuries  re- 
ceived in  the  course  of  his  employment.  Such  laws 
have  been  enacted  in  twenty-two  foreign  States. 

^^Usually  the  injuries  must  cause  disablement  for 
a specified  number  of  days  or  weeks*  before  compen- 
sation becomes  due.  The  employer  may  usually  be  re- 
lieved from  the  payment  of  compensation  if  he  can 
prove  that  the  injury  was  caused  intentionally  or  by 


176 


willful  miscouduct,  or  in  some  countries  by  the  gross 
negligence  of  the  injured  person  or  during  the  per- 
formance of  an  illegal  act. 

“The  industries  usually  covered  by  the  acts  are 
manufacturing,  mining  and  quarrying,  transportation, 
building  and  engineering  work,  and  other  employ- 
ments involving  more  or  less  hazard.  In  Belgium, 
France,  and  Great  Britain  the  laws  apply  to  practi- 
cally all  employments.  In  Austria,  llelgium,  Den- 
mark, Finland,  Germany,  Italy,  Luxemburg,  Nether- 
lands, Norway,  Russia,  Spain,  and  Sweden  only  work- 
men engaged  in  actual  manual  work,  and  in  some  cas- 
es those  exposed  to  the  same  risks,  such  as  overseers 
and  technical  experts,  come  within  the  operatif)ns  of 
the  law.  On  the  other  hand,  in  France,  Great  Britain, 
the  British  colonies,  and  Flungary  the  laws  apply  to 
salaried  employees  and  workmen  equally.  Overseers 
and  technical  experts  earning  more  than  a prescribed 
amount  are  excluded  in  Belgium,  Denmark,  Germany, 
Great  Britain,  Italy,  Luxemburg-,  and  Russia.  Em- 
ployees of  the  state,  provincial,  and  local  administra- 
tions usually  come  within  the  provisions  of  the  acts. 

“The  entire  buraen  rests  upon  the  employer  in  all 
but  four  countries,  Austria,  Germany,  Hungary,  and 
Luxemburg,  where  the  employees  bear  part  of  the  ex- 
pense. The  laws  in  everv  case  fix  the  compensation 
to  be  paid.  Except  in  Sweden  the  compensation  is 
based  upon  the  wages  of  the  injured  nerson.  It  con- 
sists of  medical  and  surgical  treatment  bud  periodical 
allowances  for  temporary  disabilitv,  and  annual  pen- 
sions or  lump-sum  payments  for  permanent  disability 
or  death.” 


a. 

Yieios  of  Foreign  Countries. 

In  the  report  put  out  by  the  Secretary  of  Commerce  and 
Labor,  in  December,  1908,  in  speaking  of  this  question  it 
is  said: 

“In  striking  contrast  with  conditions  in  the  United 
States  is  the  position  of  the  foreign  workman  who  is 


injured  by  accident  in  the  course*  nf  liis  eniplnyinent. 
Practically  every  fni*eiiiii  cmintry  of  any  iiiijiortance 
industrially  has  by  legislation  recognized  tlie  ])rin- 
ci]>le  tliat  the  workman  is  entitled  to  comjtensation 
for  injuries  from  accidents  r(‘ceived  in  the  course  of 
his  em])loyment.  Tw(Mity-tw(^  forcM^n  states  liave  en- 
acted sncli  l(\uislation,  nam(*ly,  Austria,  lUdj^inm, 
Pritisli  rolnmbia,  ra]U‘  of  (iood  Hoi)e,  Dcmmark,  Fin- 
land, France,  Germany,  Great  liritain,  Greece,  ITnn- 
f^ary,  Italy,  Luxemburg*,  Netherlands,  New  Zealand, 
Norway,  Queensland,  Ttnssia.  South  Australia,  S])ain, 
Sweden,  and  Western  Austral i.i/’ 

This  article  proceeds  to  point  out  that  in  most  of  those 
countries  there  must  be  some  detinite  j^eriod  of  disability, 
such  as  a certain  number  of  days  or  weeks;  that  the  em- 
ployer may  usually  be  relieved  if  he  can  jirove  the  injury 
intentional  or  willful,  and,  in  some  countries,  if  caused 
by  gross  negligence  or  during  the  ])erformance  of  an  il- 
legal act;  but  that  in  none  of  those  countries  does  ordi- 
nary negligence  on  the  part  of  the  employee  Avork  a for- 
feiture of  the  right  to  compensation. 

“The  industries  usually  covered  by  the  laws  are 
manufacturing,  mining  and  quarrying,  transportation^ 
building  and  engineering  Avork,  and  other  employ- 
ments involving  more  or  less  hazard.  In  Belgium, 
France,  and  Great  Britain,  the  laws  apply  to  lAracti- 
cally  all  employments.  In  a considerable  number  of 
countries  only  workmen  engaged  in  actual  manual 
Avork,  and  in  some  cases  those  exposed  to  the  same 
risks,  such  as  OA'erseers  and  technical  experts,  come 
Avitliiu  the  operation  of  the  law. ' These  countries  are 
Austria,  Belgium,  Denmark,  Finland,  Germany,  Italy, 
Luxemburg,  Netherlands,  Norway,  Bussia,  Spain,  and 
Sweden.  On  the  other  hand,  in  France,  Great  Britain, 
and  the  British  Colonies,  and  Hungary,  the  laws  ap- 
ply to  salaried  employes  and  workmen  equally.  Over- 
seers and  technical  experts  earning  more  than  a pre- 
scribed amount  are  excluded  in  Belgium,  Denmark, 
Germany,  Great  Britain,  Italy,  Luxemburg,  and  Eus- 
sia.  Employes  of  the  state,  provincial  and  .local  ad- 


178 


ministrations  usiiallj^  come  within  the  provisions  of 
the  acts. 

^^The  entire  burden  rests  upon  the  employer  in  all 
but  four  of  tlie  countries — Austria,  Germany,  Hun- 
gary and  Luxemburg — where  the  employes  also  bear 
a part  of  the  expense.  The  laws  in  every  case  fix  the 
compensation  to  be  paid.  In  all  the  countries  but 
Sweden  the  compensation  is  based  upon  the  wages 
of  the  injured  person.  It  consists  of  medical  and  sur- 
gical treatment  and  of  periodical  allowances  for  tem- 
porary disability,  and  annual  pensions  or  lump-sum 
payments  for  permanent  disability  or  death. 

^Gn  most  countries  employers  may  contract  with 
state  or  private  insurance  instil utions  for  the  transfer 
of  the  burden  of  iiayment  of  compensation.  In  a num- 
ber of  countries  such  transfer  is  obligatory.  Provis- 
ion is  usually  made  for  the  protection  of  the  bene- 
ficiaries in  case  of  insolvency  of  employers. 

^^The  acts  of  nearly  all  of  the  countries  are  framed 
with  the  view  of  obviating  the  necessity  for  instituting 
legal  proceedings.  The  laws  are  so  specific  vrith  re- 
gard to  the  compensation  allowed  and  the  regulations 
for  its  payment  that  agreements  are  usually  amica- 
bly made  between  the  employers  and  the  victims  of  the 
accidents.” 

The  article  proceeds  to  say  that  procedure  is  provided 
for  cases  where  agreement  cannot  be  had,  that  the  best 
practice  in  other  countries  fixes  a definite  comiiensation  for 
death  or  injury,  usually  based  upon  the  earning  capacity, 
which  enables  the  employer  to  calculate  with  some  degree 
of  certainty  the  additional  item  necessary  to  be  included 
in  the  cost  of  production ; that  this  becomes  as  capable  of 
calculation  as  does  fire  insurance;  that  various  plans  of 
industrial  insurance  are  in  operation  in  other  countries, 
from  which  a system  can  probably  be  worked  out ; but  sug- 
gests that  it  will  be  time  enough  to  talk  laws  when  we  place 
the  liability  upon  the  industry  itself.  That  report  sug- 
gests that  the  government  law  Which  went  into  force  Aug- ' 
ust  1,  1908,  with  respect  to  accidents- to  the  Panama  em- 


170 


plojes  should  be  so  amended  as  to  transfer  its  administra- 
tion from  the  Secretary  of  Commerce  and  Labor  to  the 
Isthmian  Canal  Commission. 

b-c. 

I 

Policy  of  Change  of  Common  Law. 

Substantially  all  of  the  states,  as  well  as  the  Federal 
Government  have  made  attempts  to  amend  the  common 
law  by  changing  some  of  the  more  objectionable  elements 
in  the  more  hazardous  employments. 

Various  laws  affecting  railways  and  other  carriers  of 
persons  exercising  special  privileges  based  upon  govern- 
mental functions,  have  been  enacted  affecting  such  mat- 
ters as  the  fellow-servant  doctrine,  safety  appliances,  com- 
parative negligence,  etc. ; other  laws  have  been  enacted  im- 
posing duties  in  the  nature  of  police  regulations  such  as 
making  it  the  duty  to  fence  elevator  shafts,  cover  danger- 
ous machinery,  limiting  the  ages  of  children,  the  hours  of 
labor  for  men  in  hazardous  occupations,  the  requirement 
of  inspection  of  mines  and  machinery,  etc.,  etc.  l>ut  until 
very  recently  no  serious  attempt  has  been  made  to  change 
the  theory  by  changing  the  basis  of  recovery. 

Repealing  the  Common  Laio. 

In  Smith  v.  Alabama^  124  U.  S.  465  (L.  Ed.  508),  the 
icour  t said : 

^^There  is  no  common  law  of  the  United  States,  in 
the' sense  of  a national  customary  law,  distinct  from 
the  common  law  of  England  as  adopted  by  the  several 
States  each  for  itself,  applied  as  its  local  law,  and 
subject  to  such  alteration  as  may  be  provided  by  its 
own  statutes.  Wheatbn  v.  Peters,  33  U,  S.  8 Pet.  591 
(L.  Ed.  1055).’’ 


180 


In  Martin  v.  Pittshurgj  etc.  Co.,  203  U.  S.  284,  L.  Ed.  184, 
the  court  liad  under  consideration  a statute  of  Pennsyl- 
vania limiting  the  right  of  certain  persons  to  recover 
against  railroads  for  damages  to  the  same  rights  which  em- 
ployes would  liave.  It  was  claimed  that  this  law  was  in- 
valid and  the  court  said:  • ' 

‘‘The  assertion  of  the  Federal  right  is  disposed  of 
when  we  determine  the  question  of  power.” 

And: 

“If  it  be  conceded,  as  contended,  that  the  plaintiff  in 
error  could  have  recovered  but  for  tlie  statute  it  does 
not  follow  that  the  legislature  of.  Pennsylvania  in  pre- 
venting a recovery  took  away  a vested  right  nor  a riglit 
of  property.  As  the  accident  from  which  the  cause 
of  action  is  asserted  to  liave  arisen  occurred  long  aftqr 
the  passage  of  the  statute,  it  is  difficult  to  grasp  tlie 
contention  that  the  statute  deprives  the  plaintiff  in 
error  oflhe  rights  just  stated.  Such  a contention  in 
reason  must  rest  upon  the  proposition  that  the  state 
of  Pennsylvania  was  without  power  to  legislate  on  the 
subject — a proposition  which  we  have  adversely  dis- 
posed of.”- 

There  is  no  constitutional  objection  to  repealing  or  mod- 
ifying the  common  law,  at  least  if  a reasonable  remedy  is 
left  as  will  be  shown  by  the  following  cases. 


Federal  Government. 

Rule  in  Admiralty. 

In  the  case  of  Steamer  Max  Morris  v.  Curry,  137  U.  S., 
page  1 (L.  Ed.  586),  the  Supreme  Court  held  that: 

“A  longshore  man,  employed  to  load  coal  on  board  a 
steamship,  and  injured  while  so  employed,  by  his  fall- 
ing from  the  steamer’s  bridge  to  her  deck,  partly 
through  his  own  negligence  and  partly  through  the 
negligence  of  ihe  steamer’s  officers,  is  entitled,  in  a suit 


181 


in  admiralty  against  tlie  vessel  for  ’daniages  for  such 
injuries,  to  a decree  for  divided  damages.” 

In  a libel  in  that  case  the  libellant,  who  in  plain  lan- 
guage in  another  court  would  be  the  plain  tilt,  charged  that 
he  fell  from  the  bridge  to  the  deck  of  the  boat  through  the 
negligence  of  those  in  charge  having  removed  from  the 
bridge  the  ladder  usually  leading  therefrom  to  the  deck, 
and  in  leaving  and  failing  to  guard  the  hole  left  thereby, 
and  that  he  Avas  not  guilty  of  any  negligence  and  that  he 
was  injured  by  the  fall  and  incapacitated  from  labor.  He 
claimed  |3,000  damages.  The  answer  alleged  negligence 
on  the  part  of  the  libellant  and  an  absence  of  negligence  on 
the  part  of  the  claimant. 

The  District  Court  entered  a decree  in  favor  of  the  li- 
bellant for  damages  of  |150,  and  $32.33  as  one-half  of  the 
libellant’s  costs,  less  $47.06  as  one-half  of  the  claimant's 
N costs,  making  the  total  award  to  the  libellant  $135.27. 

The  District  Judge  charged  to  the  libellant’s  OAvn  fault 
all  his  pain  and  suffering  and  all  mere  consequental  dam- 
ages, and  charged  the  vessel  with  his  wages  at  $2  per  day, 
for  75  working  days,  making  $150. 

An  appeal  was  taken  to  the  circuit  court  and  an  opinion 
rendered  therein  but  no  decree.  The  case  came  up  again 
before  tAvo  of  the  Judges  and  they  certified  the  question 
to  the  Supreme  Court  which  said : 

■^^The  question  discussed  in  the  opinions  of  Judge 
BroAvn  and  Judge  Wallace,  and  presented  to  us  for 
decision,  is  whether  the  libellant  was  debarred  from 
the  recovery  of  any  sum  of  money,  by  reason  of  the 
fact  that  his  OAvn  negligence  contributed  to  the  acci- 
dent although  there  was  negligence  also  in  the  officers 
of  the  vessel. 

^The  particular  question  before  us  has  never  been 
authoritatively  passed  upon  by  this  court,  and  is, 
as  stated  b}^  the  district  judge  in  his  opinion,  Avhether, 


182 


in  a court  of  admiralty,  in  a case  like  the  present, 
where  personal  injuries  to  the  libellant  arose  from  his 
.negligence  concurring  with  that  of  the  vessel,  any  dam- 
ages can  be  awarded,  or  whether  the  libel  must  be  dis- 
missed according  to  the  rule  in  common-law  cases.’’ 

The  court  proceeds  to  say  that  it  had  long  administered 
the  English  law  of  dividing  the  damages  in  admiralty  cases, 
citing  a number  of  'cases  where  it  had  been  so  done.  The 
court  pointed  out  the  distinction  of  rules  for  the  division 
of  damages  to  claims  to  the  effect  that  in  the  common  law 
court  the  defendant  must  pay  all  tlie  charges  or  none 
while  in  the  admiralty  court  the  law  would  allow  the  di- 
vision if  botli  were  at  fault. 

After  further  references  the  court  said : 

^‘They  show  an  amelioration  of  the  common  law 
rule,  and  an  extension  of  the  admiralty  rule  in  a di- 
rection which  we  think  is  manifestly  just  and  proper. 
Contributor}'  negligence,  in  a case  like  the  present, 
should  not  wholly  bar  recovery.  There  would  have 
been  no  injury  to  the  libellant  but  for  the  fault  of  the 
vessel;  and  while,  on  the 'one  hand,  the  court  ought 
not  to  give  him  full  compensation  for  his  injury, 
where  he  himself  was  partly  in  fault,  it  ought  not,  on 
the  other  hand  to  be  restrained  from  saying  that  the 
fact  of  his  negligence  should  not  deprive  him  of  all 
recovery  of  damages.” 


When  President  Taft  was  sitting  as  a Circuit  Judge, 
1897,  in  the  court  of  appeals,  with  Mr.  Justice  Harlan  and 
Circuit  Judge  Lurton,  the  case  of  Pierce  n.  Van  Dusen,  78 
Federal  Reporter,  693,  was  before  the  court.  The  opinion 
was  written  by  Circuit  Justice  Harlan,  and  is  very  able, 
referring  at  length  to  the  authorities  of  the  United  States 
Supreme  Court  and  others,  at  page  700  the  opinion  says:  - 

^‘Undoubtedly  the  whole  subject  of  the  liability  of 
interstate  railroad  companies  for  the  negligence  of 
those  in  their  service  may  be  covered  by  national  legis- 


183 


lation  enacted  by  congress  iiinbn*  its  power  to  regulate 
commerce  among  the  states.  Hut,  as  congress  lias  not 
dealt  with  that  subject,  it  was  comjjetent  for  Ohio  to 
declare  that  an  employe  of  any  railroad  corporation 
doing  business  here,  including  those  engaged  in  com- 
merce among  the  states,  shall  be  deemed  in  resjiect  to 
his  acts  within  this  state,  the  superior  not  the  fellow 
servant,  of  other  employes  ])laced  under  his  control.'^ 
See  opinion  of  Judge  Taft  in  Warramore  v.  Clave- 
land  ^ etc.  Ry.  Co.,  0(>  Fed.  298. 

On  June  11th,  1900,  Congress  passed  an  act  intending  to 
regulate  interstate  carriers  in  favor  of  emplo^^er’s  liability, 
etc. 

The  Supreme  Court  declared  that  act  unconstitutional 
upon  the  theory  that  it  covered  intrastate  as  well  as  inter- 
state  business.  The  act  established  contributory  negli- 
gence and  prohibited  contracted  benefits  except  pro  rata. 

The  opinion  is  recorded  in  Uoivard  v.  Illinois  C.  R.  Co., 
207  U.  S.  403  (L.  ed.  297). 

That  opinion  was  by  Mr.  Justice  AYhite  and  with  him 
Mr.  Justice  Day  concurred.  Air.  Justice  Peckam  concur- 
red in  a short  memorandum  but  he  and  the  Chief  Justice 
and  Air.  Justice  Brewer  were  not  prepared  to  agree  Avith  all 
that  the  opinion  said  upon  the  power  of  Congress  to  legis- 
late upon  the  subject  of  the  relations  between  master  and 
servant. 

Air.  Justice  Aloody  dissented  in  a very  long  and  able 
opinion.  Air.  Justice  Harlan  and  Air.  Justice  AIcKenna 
agreed  in  a short  dissenting  opinion  and  Air.  Justice 
Holmes  dissented  in  still  another  short  opinion;  but  of 
these  various  opinions  it  would  appear  to  be  the  rule,  very 
clearly  decided  by  the  majority  at  least,  if  not  by  all  of 
the  justices,  although  it  may  be  doubtful  whether  three 
of  the  Justices  agree  thereto,  that  Congress  has  power  to 
legislate  on  the  subject  of  master  and  servant  with  re- 


184 


spect  to  matters  covering  interstate  commerce. 

In  the  course  of  his  dissenting  opinion  Mr.  Justice  Moodv 
reviews  opinions  bearing  upon  different  phases  of  this  ques- 
tion. 

In  the  case  of  ^iiead  v.  Central  of  Georgia  Ry.  Co.,  151 
Fed.  G08,  District  Judge  Spear  had  delivered  a very  elab- 
orate opinion  in  which  he  sustained  the  Act  of  June  11, 
1906.  His  comments  upon  the  nature  of  this  legislation 
at  page  619  are  well  worthy  of  reproduction  here: 

‘‘Nor  is  the  enactment  of  such  measures  as  that  un- 
der consideration  a novel  or  unusual  power  on  the  part 
of  government.  Our  own  state,  it  seems,  was  the  pio- 
neer in  a measure  of  partial  relief  from  that  strict  rule 
which  was  first  enunciated  in  England  in  1837,  which 
forbade  the  recovery  by  tlie  employe  for  injuries  in- 
flicted by  the  negligence  of  a fellow  servant.  The  Geor- 
gia law  upon  this  subject  was  enacted  in  1856  so  far 
as  it  related  to  railroads.  In  1862  Iowa  abolislied  the 
fellow  servant  bar  as  to  trainmen  and  in  1874  Kansas 
did  the  same  thing.  In  1885  the  state  of  Alabama 
adopted  similar  legislation,  and  in  1893  Arkansas 
qualified  the  doctrine  as  to  railroad  employment.  Min- 
nesota followed  in  1887.  Florida,  Oliio,  ^Mississippi, 
and  Texas  have  modified  the  doctiine  for  the  benefit 
of  employes.  Nortli  Carolina,  North  Dakota,  Massa- 
chusetts, Wisconsin  and  Minnesota  denied  its  appli- 
cability to  the  operation  of  railroad  trains,  and  in 
1901  Colorado  abolished  the  doctrine  in  toto.  Nor 
have  foreign  governments  been  inattentive  to  this 
great  and  unreasonable  injustice  to  that  splendid 
body  of  citizenship  upon  whom  so  much  of  the  pros- 
perity of  the  nation  must  depend.  In  1888  England 
denied  its  application  to  those  engaged  in  the  opera- 
tion of  railroad  trains,  and  in  1897  made  it  also  inap- 
plicable to  many  other  hazardous  employments.  In 
Germany  it  does  not  apply  to  any  of  the  hazardous 
occupations.  In  1869  Austria  passed  a law  making 
railroad  companies  liable  for  all  injuries  to  their  em- 
ployes save  where  the  iniurv.  was  due  to  the  victim^s 
own  negligence.  The  Code  Napoleon  made  the  em- 


185 


ployer  answerable  fur  all  injuries  received  by  bis 
workmen,  and  this  is  still  of  force  in  France,  in  Bel- 
gium and  an  Holland.  Other  European  countries 
have  from  time  to  time  hxed  the  liability  of  the  mas- 
ter to  his  servant  for  damages  caused  by  the  negligent 
act  of  a fellow  servant.  It  is,  however,  unhappily 
true  that  many  states  of  the  Union,  notwithstanding 
the  anachronism  of  the  rule,  have  maintained  and  still 
enforce  it.  But  Congress  has  at  length  determined 
that  there  shall  be  an  uniform  law  for  the  protection 
of  that  army  of  more  than  a million  men  engaged  in 
interstate  trahic — an  army  whose  courage,  decision, 
patriotism,  and  intelligence  may  not  be  surpassed. 

' ‘‘The  rule  which  this  legislation  abrogates  was  bas- 
ed upon  the  contention  that  the  servant  contracts  for 
a wage  sufficient  to  protect  him  against  risks  incident 
to  the  service  that  he  is  in  a better  position  to  observe 
and  protect  himself  against  the  negligence  of  his  fel- 
low servant  than  his  employer,  and  that  it  will  in- 
sure better  service  and  less  injury  if  the  master  be  not 
responsible.  The  briefest  consideration  will  show 
how  archaic  is  this  reasoning  when  applied  to  mod- 
ern, conditions.  Take  the  engineer  on  the  locomotive 
which  drives  the  lightning  express.  The  complexit}^  of 
his  mighty  machinery  requires  his  constant  and  care- 
ful attention.  Possibly  in  the  darkness  of  night,  50 
or  60  miles  an  hour  his  train  thunders  along  the 
gleaming  rails.  His  is  blind  obedience  to  his  orders. 
Through  the  mistake  or  negligence  of  a fellow  servant, 
over  whose  action  he  has  no  control,  of  whose  mistake 
or  misconduct  he  has  no  knowledge,  in  an  instant  he 
may  be  hurled  to  death  or  to  mutilation  indescribable. 
While  this  is  true,  under  the  law  v/hich  the  act  of  Con- 
gress repeals,  it  has  been  held  that  the  relation  of  fel- 
low servant  existed  between  an  engineer  acting  as 
conductor  and  his  fireman,  between  a common  day  la- 
borer, building  a culvert  and  the  engineer  and  conduc- 
tor running  a train,  between  an  engineer  operating 
one  train  and  the  conductor  on  another  train  on  the 
same  road,  between  conductor  and  brakeman  on  the 
same  train,  between  the  local  telegraph  operator  and 
fireman  upon  the  train,  and  in  view  of  these  relations, 
shadowy  and  intangible  as  they  are,  yet  justified  by 
the  law  as  it  existed,  it  has  been  held  that  the  em- 


186 


ployer  was  not  liable  for  the  death  and  suffering 
Avhich  resulted.  The  law  is  a progressive  science. 
The  rule  has  long  been  deemed  most  unjustifiable.  In 
Lahatt  on  Master  and  Servant,  Vol.  2,  Sec.  751  it  is 
declared : 

^It  does  not  rest  upon  any  satisfactory  bases,  log- 
ical, social,  or  economic,  and  by  relegating  the  in- 
jured person  to  his  action  against  a co-employe,  who 
is,  as  a general  rule,  financially  irresponsible,  leaves 
him  in  the  great  jnajority  of  instances,  without  any 
prospect  Avhatever  of  obtaining  the  adequate  indem- 
nity.’ 

^‘Such  conditions  Avill  no  longer  exist.  Said  the 
house  committee  in  its  report  on  this  measure: 

^Now  where  the  doctrine  of  fellow  servant  is  in 
force  no  one  is  responsible  for  the  injury  or  death  of 
the  felloAv  servant.  The  co-senmnt  Avho  is  guilty  of 
negligence  resulting  in  the  injury  may  be  liable,  but 
as  a rule,  he  is  not  responsibe.  Employes  are  never 
held  to  such  strict  rules  for  the  safety  of  his  co-em- 
ployes, because  the  employer  is  not  bound  to  pay  dam- 
ages in  case  of  injury.  If  he  Avere  held  liable  for  dam- 
ages for  eA^ery  injury  occasioned  by  the  negligence  of 
his  servants,  he  would  enforce  the  same  strict  rules 
for  the  safety  of  his  employes  as  he  does  for  the  safety 
of , passengers  and  strangers,  he  will  make  the  employ- 
ment of  his  seiwant  and  his  retention  in  the  service  de- 
pendent upon  the  exercise  of  higher  care,  and  this  will 
be  a strong  inducement  to  the  employe  to  act  with 
liigher  regard  for  the  safety  of  his  fellow  workmen.’  ” 
^iiead  V.  Central  of  Georgia  By.  Co.,  151  Fed.  608- 
619. 


Presidents  Urge  Change. 

As  early  as  the  first  message  of  Benjamin  Harrison,  sent 
to  Congress  in  1889,  vre  find  the  following  expression: 
Page  51,  Vol.  9,  ‘Alessages  and  papers  of  the  Presidents” : 

‘5^The  attention  of  the  Interstate  Commerce  Com- 
mission has  been  called  to  the  urgent  need  of  Con- 
gressional legislation  for  the  better  protection  of  the 
> lives  and  limbs  of  those  engaged  in  operating  the 


1ST 


great  interstate  freight  lines  of  the  country  and  es- 
pecially of  the  yardmen  and  brakemen.  A petition 
signed  by  nearly  10,000  railway  brakemen  was  pre^ 
sented  to  the  Commission  asking  that  steps  be  taken' 
to  bring  about  the  use  of  automatic  breaks  and  coup- 
lers on  freight  cars. 

‘‘At  a meeting  of  the  State  railroad  commissioners 
and  their  accredited  representatives  held  at  Washing- 
ton in  March  last  upon  the  invitation  of  tlie  Interstate 
Commerce  Commission  a resolution  was  unanimously 
adopted  urging  the  Commission  ‘to  consider  what  can 
be  done  to  prevent  the  loss  of  life  and  limb  in  coupling 
and  uncoupling  freight-  cars  and  in  handling  the 
breaks  of  such  cars.”  During  tlie  year  ending  June 
30,  1888,  over  2,000  railroad  employes  were  killed  in 
service  and  more  than  20,000  injuries.  It  is  compe- 
tent, I think,  for  Congress  to  require  uniformity  in 
the  construction  of  cars  used  in  interstate  commerce 
) and  the  use  of  improved  safety  appliances  upon  such 
trains.  Time  will  be  necessary  to  make  the  needed 
changes,  but  an  earnest  and  intelligent  beginning 
should  be  made  at  once.  It  is  a reproach  to  our  civ- 
ilization that  any  class  of  American  workmen  should 
in  the  pursuit  of  a necessary  and  useful  vocation  be 
subjected  to  a peril  of  life  and  limb  as  great  as  that 
of  a soldier  in  time  of  war.” 

In  February,  1903  he  sent  to  Congress  the  special  report 
of  the  Commission  of  Labor  relating  to  injuries  of  workmen 
in  Germany  and  other  countries. 

We  need  not  call  the  attention  of  this  assembly  to  the 
fact  that  President  Harrison  was  an  able  lawyer  as  well  as 
a great  statesman  and  probbly  knew  at  the  time  he  wrote 
that,  the  exact  status  of  this  matter  in  Europe.  , 

The  safety  appliance  act  passed  Congress  as  a result  of 
this  agitation  and  this  and  other  recommendations  and  a 
portion  of  the  above  quotation  from  President  Harrison  is 
found  in  the  opinion  of  the  Supreme  Court  in  maintaining 
the  act. 


188 


In  his  message  to  congress,  in  1908,  President  Roosevelt 
said : 

a man  is  injured  or  killed  in  any  line  of  work, 
it  was  hazardous  in  his  case;  whether  one  per  cent  of 
those  following  the  given  occupation  actually  suffer 
injury  or  death  ought  not  to  have  any  bearing  on  the 
question  of  his  receiving  compensation.’^ 

Later  on  in  his  message  he  says ; 

^Trobably  in  no  othes  respect  is  our  legislation,  both^ 
state  and  national,  so  far  behind  practically  the  entire 
civilized  world  as  in  the  matter  of  liability  compensa- 
tion in  accident  or  injury.” 

To  meet  the  decision  of  the  majority  in  the  Hotoard  case 
the  act  of  April  22,  1908,  was  passed.  It  seems  to  be  a fix- 
ed rule  of  the  government  that  it  may  require  employes  of 
railroad  companies,  engaged  in  interstate  commerce,  to  be 
protected  b}^  safety  appliances  or  otherwise  but  there  is 
no  other  reason  why  they  should  not  be  greatly  extended 
if  the  governmental  necessities  demanded  it.  We  under- 
stand also  that  there  are  some  legislative  acts  that  we  have 
not  yet  examined  Avhich  cover  the  rights  of  government  em- 
ployes. There  is  not  any  longer  a question  but  that  the 
government  is  able  to  provide  regulations  for  its  own  em- 
ployes as  indicated  under  Subdivision  *11,  supra. 

The  congressional  record  of  May  30,  1908,  contains  a 
very  able  argument  giving  a synopsis  of  English  laAV  as  a 
part  of  an  article  contained  in  a speech  printed  from  Hon. 
Geo.  A.  Bartlett  of  Nevada  as  an  argument  in  fa^mr  of  Mr. 
Bartlett’s  proposed  bill.  A very  interesting  and  ably  pre- 
pared argument  is  also  printed  by  Congressman  Sabbath, 
(the  page  do  not  have)  in  faA^or  of  his  proposed  meas- 


ure. ' 


189 


Other  States. 

In  1905  the  legislature  of  the  state  of  Illinois  passed  a 
joint  resolution  reciting,  in  effect,  that  owing  to  the  lim^ 
ited  time  at  its  disposal  and  tlie  importance  of  the  ques- 
tion, a commission  should  be  appointed  to  investigate  the 
subject  of  a proper  law  for  industrial  insurance,  etc.  In 
that  resolution  it  was  recited,  among  other  tilings,  as  a 
commentary  upon  the  sad  conditions  existing. 

‘This  melancholy  fact,  of  which  all  are  conscious, 
poisons  the  present  and  fills  the  future  with  fears.’’ 

The  report  of  that  commission  published  much  valuable 
information  in  connection  with  the  report.  It  drafted  two 
bills,  one  making  it  lawful  for  employer  and  employe  to 
enter  into  a contract  to  insure  the  employe  against  acci- 
dents occurring  in  the  course  of  employment,  and  that  in 
consideration  of  such  insurance  the  employer  should  be  re- 
lieved of  the  consequences  of  injuries,  under  other  provis- 
ions of  the  law.  The  report  covered  not  only  that  bill  but 
a form  of  contract  and  bond  which  the  parties  might  exe- 
cute. The  committee  also  reported  a second  bill  some- 
what along  the  lines  of  the  German  bill,  which  their  coun- 
sel advised  was  unconstitutional;  but  they  reported  it  up- 
on the  theory  that  it  loould  be  valuable  as  (in  educational 
measure,  and  that  someivhere,  sometime,’ some  legal  talent 
would  rise  up  that  would  be  able  to  enact  a law  that  would 
conform  to  our  constitutions. 

We  call  attention  to  this  and  the  Connecticut  report 
with  a view  of  justifying  such  elaborate  discussions  rather 
than  setting  our  judgment  against  theirs. 

The  Illinois  commission  is  still  in  existence,  but  the  bills 
which  it  recommended  were  not  adopted,  and  it  is,  as  we 
understand,  from  one  of  its  members,  not  very  active  at 


190 


the  present  time  as  a commission,  although  Prof,  Hender- 
son, one  of  its  members,  lias  been  quite  active  in  the  study 
of  the  question. 

Massachusetts  had  a joint  special  committee,  consist- 
ing of  three  members  of  the  senate  and  eight  members  of 
the  house  of  representatives.  That  committee  had  sub- 
mitted to  it  various  bills.  It  held  a great  many  public 
sessions,  and  finally  a majority  made  a report  to  the  effect 
that  absolute  liability  should  not  be  imposed  upon  the  em- 
ployer, but  recommended  a law  permitting  the  employer 
to  submit  to  the  state  board  of  arbitration  and  concilation 
a plan  based  upon  the  percentage  of  the  earning  capacit}^, 
under  the  common  law  or  liabilities  act,  b}^  which  he  might 
settle  in  case  of  accident.  Of  course  the  majority  disagreed 
or  there  would  have  been  no  minority. 

New  York  and  Wisconsin  have  commissions  also. 
Connecticut  had  a commission  appointed  in  1907,  that 
commission  reported,  among  other  tilings: 

^‘The  committee  unanimously  agree  that  very  prob- 
ably the  future  relations  of'employer  and  employe  will 
- be  settled  by  legislation  along  this  line. 

^‘The  committee  have  not  been  able  to  agree  in  the 
matter  of  recommending  such  an  act  at  this  time.  The 
representatives  of  the  employer  and  labor  classes 
would  have  been  willing  to  recommend  a bill  which 
should  provide,  first  for  definite  and  limited  compen- 
sation to  employes  in  certain  lines  of  industry  for  all 
injuries  incurred  in  the  course  of  their  employment 
resulting  in  death  or  permanent  disability;  and  sec- 
ond, the  opportunity  to  insure  against  injuries  and 
sickness.  The  compensation  in  the  first  case  to  be 
borne  exclusively  by  the  employer  and  jn  the  second 
case  the  cost  of  insurance  to  be  borne  by  employee 
and  employe.  The  committee,  as  a whole,  however, 
did  not  believe  the  people  of  this  state  were  ready  to 
take  a step  so  radically  different  from  the  present 
practice.  It  was  also  very  questionable  with  the  com- 
mittee whether  so  small  a section  of  our  country 


191 


should  take  such  a step  alone  and  so  possibly  place 
the  producers  of  this  state  at  a disadvantage  with 
those  of  other  states. 

^‘The  lawyer  on  the  coniniittee  thouglit  tiiere  were 
possible  constitutional  objections  to  an  act  of  this  na- 
ture and  questioned  seriously  its  adaptability  to  pres- 
ent conditions;  and  furtiier  thought  'it  would  be  un- 
wise for  the  state  of  Connecticut  to  undertake  legis- 
lation of  this  character  until  the  public  generally  had 
given  the  matter  more  consideration  tlian  up  to  the 
present  time  it  has  received. 

^‘After  a serious  consideration  of  the  advantages 
claimed  for  a Compensation  Act  and  also  a considera- 
tion of  the  objections  raised  to  the  proposal  of  such  an 
act  at  this  time,  the  committee  decided  that  it  was 
not  wise  to  recommend  a bill  of  this  nature  to  this 
General  Assembly.” 


Minnesota. 

At  the  annual  meeting  of  the  Minnesota  State  Bar  As- 
sociation held  in  the  city  of  Duluth  August  14-15,  1908,  a 
paper  was  read,  and  discussion  had  upon  this  question, 
which  resulted  in  a motion  that  was  finally  amended  and 
passed,  referring  to  the  Committee  on  Jurisprudence  and 
Law  Reform  the  duty  of  investigating  the  subject  and  if  it 
thought  advisable  drawing  a bill  that  would  accomplish 
the  results  now  under  discussion.  For  fear  that  the  com- 
mittee might  put  up  a radical  bill,  that  association  finally 
so  amended  its  motion  as  to  require  the  committee  to  draft 
the  bill,  if  it  could  do  so,  and  allow  the  president  to  call  a 
special  meeting  to  be  held  in  December,  in  St.  Paul  ^to  dis- 
cuss that  question.  The  chairman  of  that  committee  was 
unable  to  take  up  the  work,  as  he  reported  to  the  presi- 
dent in  the  latter  part  of  October,  and  at  his  request  the 
president  appointed  the  present  chairman  of  the  Minne-' 
sota  commission  chairman  of  that  committee.  Upon  his 


192 


acceptance,  he  immediately  took  up  correspondence  Avith 
other  members  of  the  committee,  with  labor  leaders,  such 
as  Mr.  Gompers,  Mr.  Mitchell  Mr.  Debs,  and  the  Commis- 
sioner of  Labor  of  Minnesota  and  the  commissioners  of 
various  states  and  others  interested  in  the  matter,  with 
certain  capitalists  like  Mr.  Hill  and  Mr.  Carnegie,  Avith 
government  officials  like  the  Commissioner  at  Washington 
and  the  Secretary  of  the  Interstate  Commerce  Commission, 
with  some  of  the  librarians  of  the  best  equipped  libraries 
on  the  subject,  and  numerous  others  Avho  liad  giA^en  special 
attention  to  the  matter. 

During  the  course  of  that  correspondence,  meetings  Avere 
arranged  with  the  labor  unions  and  the  President  of  the 
Minnesota  Employers’  Association  and  then  with  Mr.  Mc- 
Ewen,  who  was  about  to  become  the  present  Labor  Com- 
missioner, (now  both  members  of  the  Minnesota  EmploA^es’ 
Compensation  Commission)  first  separately  and  then  joint- 
ly* 

The  resulting  conferences  was  a petition  to  the  governor 
of  the  state  to  send  a special  message  to  the  legislature,  re- 
questing the  appointment  of  a commission  to  investigate 
the  subject,  and  the  passage  of  a law  requiring  the  data 
of  accidents  fo  be  reported,  in  order  that  some  definite 
knowledge  might  be  gained  to  aid  in  the  drafting  of  a law. 

This  called  forth  more  or  less  political  discussion,  and 
the  matter  became  one  which  created  considerable  contro- 
versy in  the  legislature.  The  result,  however,  was  that 
three  bills  were  passed;  Chapter  286,  appointing  the  com- 
mission; Chapter  234,  requiring  insurance  companies  to 
report  accidents  for  a certain  period  to  the  commission; 
and  Chapter  235,  requiring  employers  to  report  accidents, 
with  data  in  connection  therewith,  to  the  Labor  Commis- 
sioner. The  governor  appointed  the  present  commission- 


193 


ers  and  they  assumed  the  power  or  presumed  the  necessity 
of  hringiny  about  the  Atlantic  City  Conference. 

With  the  question  of  the  desirability  of  a change  tlu^ 
Minnesota  commission  lias  nothing  to  do.  The  legislature 
of  our  state  has  committed  itself  to  the  doctrine  that  the 
change  is  necessary.  It  has  directed  us  to  investigate  the 
laws  in  force  in  foreign  countries;  to  draft  a bill  or  bills 
which  we  think  proper  to -make  the  change  in  Minnesota 
and  present  those  bills  with  our  report,  containing  enough 
data  and  facts  to  show  the  strength  and  weakness,  from 
a practical  standpoint,  when  considered  in  the  light  of  our 
constitutional  provisions.  The  question,  then,  in  Minne- 
sota., is  not  whether  a change  is  desirable,  but  whether 
or  not  such  a law  as  the  commission  may  draft  shall  be  a 
desirable  law  to  effectuate  the  change  which  all  concede 
should  be  made  if  it  can  be  done  fairly  to  all  concerned. 
The  Russel  Sage  Foundation  has  sent  two  vrell  equipped 
gentlemen.  Dr.  Lee  K.  Frankel  and  Mr.  Miles  M.  Dawson, 
to  study  the  practical  workings  in  foreign  countries. 

Tlie  granting  of  public  franchises  has  not  been  to  labor; 
the  exercise  of  eminent  domain  does  not  fall  to  its  lot;  the 
influences  of  social  and  financial  standing  are  not  exercised 
in  its  favor.  Why  should  not  it  have  thep)rotection  which 
will  equalize  conditions?  Not  equalize  in  the  impossible 
sense  of  arbitrary  destruction  of  the  rights  of  one  in  favor 
of  another,  but  in  the  sense  of  equalizing  opportunity  with 
respect  to  a matter  where  it  has  not  previously  existed. 

The  theory  has  all  along  been  that  each  human  being 
would  select  the  calling  he  desired  and  make  sufficient 
thereby  to  get  his  profit  above  the  losses  including  his  own 
waste  and  that  his  health  and  luck  were  his  capital,  his 
weakness  and  injuries  his  misfortunes.  If  he  vrrongfully 
hurt  another  he  must  stand  the  damages  No  one  doubts 


194 


that  rule  when  the  damage  is  not  one  incident  to  unequal 
disadvantage  or  occasioned  bj  connection  with  a system  for 
general  good  which  causes  injuries. 

The  government  has  always  paid  men  salaries  or  wages 
in  war,  yet  it  has  recognized  that  men  must  be  hurt  as  a 
part  of  the  system,  and  for  the  injuries  it  has  allowed  pen- 
sions. Some  of  the  larger  industries  are  now  pensioning 
their  men  for  business  reasons.  All  stand  the  element  of 
negligence  risk,  a few  voluntarily  assume  pure  accidents. 

When  the  Employes’  Association,  tlie  workmen,  and  the 
lawyers  joined  in  a request  for  a commission  to  investigate 
and  draft  a law  or  laAvs  on- this  subject  and  otlier  laws  to 
get  data,  our  legislature  was  deluged  with  bills  attempting 
to  get  speedy  action  on  the  ground  of  necessity.  Anyone 
of  them  might  have  been  passed  by  a majority  irrespective 
of  their  just  application  to  the  subject.  That  would  liave 
been  arbitrary  action.  Our  legislature  evidently  so  felt. 
But  the  action  which  it  did  take  to  require  the  subject  to 
be  investigated  at  home  and  abroad  was  the  action  of  that 
judicial  care  wliich  hears  before  it  condemns  and  acts  upon 
facts  and  judgment  as  distinguished  from  arbitrary  and 
biased  exercise  of  power. 

The  action  iclien  tal’en  icill  not  he  arhitrary  and  will  he 
ivithin  the  police  potcer. 

Tlie  government  of  the  United  States  and  a very  large 
proportion,  if  not  all,  of  the  states,  will  upon  admission  or 
implied  assumption,  agree  that  the  common  law  has  become 
and  is  becoming  obsolete  upon  this  question,  or  perhaps  it 
might  ratlier  be  said  that  the  common  law  has  not  yet  ad- 
vanced with  the  times  sufficiently  to  meet  the  changes  and 
protect  against  the  liazards.  In  this,  instance  the  movement 
like  the  instigations  themselves  was  rather  evolutionary 
tlian  revolutionary;  but  as  many  of  the  institutions  have 


195 


been  revolutionized  there  is  no  reason  wliy  the  theory  of 
recovery  should  not  be  revolutionized,  if  that  is  necessary 
to  keep  apace  with  the  necessities. 

XII. 

THE  SIMPLEST  REMEDY,  ALREADY  WELL  JUS-, 
TIE  LED  LOR  PROPERTY  l^SURAYCE,  IS  TO  FIX  A 
DEITXITE  LIABILITY  BY  LAW  FOR  HAZARDOUS 
IXDl  SERIES  OX  COXDITIOX  THAT  THE  AMOUXT 
OF  DAMAGES  BE  SUBMITTED  TO  ARBITRATIOX 
—REPEAL  THE  COMMOX  LAW. 

Arhitration  of  insurance  problems  lil'e  this  might  be  re- 
qnired  by  the  state  in  furtherance  of  its  police  power. 

This  is  a risk;  it  is  really  an  insurance  problem  and  as 
such  must  be  treated.  This  does  not  mean  that  prevention 
of  accidents,  could  not  be  otherwise  lessened.  But  it  does 
mean  that  as  an  insurance  problem  it  may  be  and  neces- 
sarily must  be  treated  as  an  insurance  problem.  As  such 
the  law  would  be  the  same.  The  field  is  quite  well  laid  out ; 
the  constitutionality  well  determined. 

As  insurance  it  comes  within  the  police  power.  Under 
that  power  the  form  of  contract  covering  the  dangers  may 
be  regulated — ^the  remedy  simplified. 

In  Minnesota  we  have  a standard  form  of  fire  insurance 
policy  which  requires  (Rev.  Stat.  Minn.  1905,  Sec.  1640)  : 

1640.  Standard  Policy. — No  fire  company  shall  is- 
sue on  property  in  this  state  any  policy  other  than  the 
standard  form  herein  set  forth,  the  blanks  for  which 
may  be  filled  in  print  or  writing,  and  no  condition, 
stipulation,  or  term,  other  than  those  therein  provid- 
ed for,  whether  as  to  jurisdiction,  limitation,  magis- 
trate, certificate,  or  otherwise,  shall  be  valid  if  in- 


19G 


serted  in  any  such  policy,  except  as  follows:  (then  fol- 
lows certain  exceptions). 

In  Wild  Rice  L.  Co.  v.  Royal  Ins.  Co.,  99  Minn.  190-192, 
the  court  said: 

glance  at  the  histor}^  of  the  standard  form  of  pol- 
icy makes  it  very  clear  that  the  legislature  of  this 
state  intended  to  deprive  tire  insurance  companies  of 
the  right  to  add  to  or  change  the  terms  and  conditions 
of  the  prescribed  form.  Th  right  to  make  such  chang- 
es and  additions  is  one  of  the  principal  distinguish- 
ing characteristics  of  the  two  classes  of  standard 
forms.  The  Massachusetts  and  Xew  York  standard 
policies  went  into  effect  about  the  same  time  and  have 
formed  the  models  for  the  legislation  in  other  states. 
Both  states  were  seeking  uniformity  of  insurance  con- 
tracts, but  Massachusetts  did  not  attempt  to  deprive 
the  parties  of  the  liberty  of  making  their  own  con- 
tracts. It  merely  adopted  a model  which  the  parties 
were  at  liberty  to  modify  at  will.  But  New  York  went 
further  and  determined  the  form  which  all  must  use 
with  the  privilege  of  adopting  certain  prescribed  claus- 
es to  cover  particular  conditions.  The  Minnesota  acl 
of  1889  imposed  upon  the  insurance  commissioner  the 
duty  of  prepareirg  a standard  form  of  policy  which 
should  be  obligatory  after  that  year.  The  New  York 
form  was  prepared  and  went  into  use  but  the  act  was 
declared  unconstitutional  because  it  attempted  to  dele- 
gate legislative  powers  to  the  insurance  commissioner. 
In  1895  the  legislature  adopted  the  Massachusetts 
form  with  such  modifications  as  were  necessary  to 
avoid  conflict  with  the  valued  policy  law.  * * * 

^‘The  conclusion  is  inevitable  that  the  legislature  in- 
tended to  deprive  the  parties  of  the  right  to  make  in- 
surance contracts  in  any  form  except  as  prescribed  by 
the  statute.  * « * * 

^The  prescribed  form  with  the  changes  thus  author- 
ized is  the  only  form  of  fire  insurance  contract  author- 
ized by  the  laws  of  the  state.’’ 

Wild  Rice  L.  Co.  v.  Royal  Ins.  Co.,  99  Minn.  190- 
93-95. 


197 


In  BtaU  V.  Beardsley^  88  Minn.  20-25,  it  is  said: 

^^It'lias  been  licdd  that  tlie  insurance  code  api>lies  to 
foreign,  nintual,  unincorporated  associations,  as  well 
as  those  properly  incorporated,  and  lliat  neitlier  can 
do  business  in  this  state  without  a license.  Hcamam 
V.  Christian  1 Mothers  Mill  (Jo.,  GG  Minn.  205,  (>8  N.  W. 
10G5.  In  a sister  state  it  lias  been  lield,  under  a stat- 
ute quite  similar  to  our  own,  that  the  required  certifi- 
cate must  be  obtained  by  individuals  or  associations 
doing  insurance  business,  as  well  as  by  corporations. 
mate  V.  more,  118  Mo.  388,  24  S.  w’.  1G4.  Sucli  a 
conclusion  is  inevitable  unless  we  are  to  permit  irre- 
sponsible persons  engaged  in  a business  Avhicli  needs 
supervision  by  the  auiliorities  to  compete  Avith  corpor- 
ations under  surveilance.  The  supervisory  provisions 
of  tlie  insurance  code  are  a legitimate  exercise  of  the 
police  powers  of  the  state,  and  there  is  no  discrimina- 
tion in  favor  of  our  OAvn  citizens.  They  apply  Avith 
equal  force  to  all  companies  and  to  all  persons,  the  ob- 
ject of  the  laAv  being  to  protect  the  public.  All  agents 
acting  for  individuals,  partnerships,  associations,  or 
corporations  engaged  in  the  insurance  business  must 
be  licensed  by  the  insurance  commissioner  before  so 
acting  and  transacting  business,  and  all  are  prohib- 
ited therefrom  without  this  license.’’ 

State  V.  Beardsley , 88  Minn.  20-25. 


Vtlij  could  not  any  dangerous  employment  giving  rise  to 
the  necessity  of  exercising  police  power,  be  required  to 
make  a standard  form  of  contract  Avith  a similar  clause? 
It  is  only  another  kind  of  insurance. 

If  such  contract  can  be  required  as  a.  condition  of  pen 
forming  that  dangerous  business  and  the  contract  specified 
by  the  state,  then  it  could  just  as  well  say  that  the  rights 
exist  in  every  contract  of  employment  and  the  liabilities 
fiow  therefrom  by  virtue  of  the  law  without  contract. 

The  policy  also  must  contain: 

^^In  case  of  any  loss  or  damage  under  this  policy,  a 
statement  in  writing,  signed  and  sworn  to  by  the  in- 
sured, shall  be  forthwith  rendered  to  the  company,  set- 


. 198 


ting  forth  the  value  of  the  property  insured,  except  in 
case  of  total  loss  on  buildings  the  value  of  said  build- 
ings need  not  be  stated,  the  interest  of  the  insured 
therein,  all  other  insurance  thereon,  in  detail,  the  pur- 
pose for  which  and  the  persons  by  whom  the  building 
insured,  or  containing  the  property  insured,  was  used, 
and  the  time  at  which  and  manner  in  which  the  fire 
originated,  so  far  as  known  to  the  insured. 

The  company  may  also  examine  the  books  of  ac- 
count and  vouchers  of  the  insured,  and  make  extracts 
from  the  same. 

In  case  of  any  loss  or  damage,  the  company,  within 
sixty  days  after  the  insured  shall  have  subiiiitted  a 
statement  as  provided  in  the  preceding  clause,  shall 
either  pay  the  amount  for  wliicli  it  shall  be  liable, 
which  amount,  if  not  agreed  upon  shall  be  ascertained 
by  av/ard  of  referees,  as  hereinafter  provided,  or  re- 
place the  property  Avith  other  of  the  same  kind  and 
goodness,  or  it.  may,  within  fifteen  days  after  such 
statement  is  submitted  notify  the  insured  of  its  inten- 
tion to  rebuild  or  repair  the  premises  or  any  portion 
thereof  separately  insured  by  this  policy,  and  shall 
thereupon  enter  upon  said  premises  and  proceed  t^> 
rebuild  or  repair  the  same  with  reasonable  expedi- 
tion.’’ 

Per  R.  L.  Minn.  1905,  Section  1640. 


Arhitratioii  as  a Condition  Precedent  to  Suit. 

The  Minnesota  standard  form  of  fire  policy  provides : 

‘‘In  case  of  loss,  except  in  case  of  total  loss  on  build- 
ings, under  this  policy,  and  a failure  of  the  parties  to* 
agree  as  to  the  amount  of  loss,  it  is  mutually  agreed 
that  the  amount  of  such  loss  shall  be  referred  to  Three 
disinterested  men,  the  company  and  the  insured  each 
choosing  one  out  of  three  persons  to  be  named  by  the 
other,  and  the  third  being  selected  by  the  two  so 
chosen.  The  aAAmrd  in  Avriting  by  a majority  of  the 
referees  shall  be  conclusive  and  final  upon  the  parties 
as  to  the  amount  of  loss  or  damage,  and  such  reference,' 
unless  waived  by  the  parties,  shall  be  a condition 
precedent  to  any  right  of  action,  in  law  or  equity,  to 
recover  for  such  loss ; but  no  person  shall  be  chosen  or 


199 


act  as  referee,  against  the  objection  of  either  party, 
who  has  acted  in  a like  capacity  witliin  four  iiionths. 

^^No  suit  or  action  against  the  conipany  for  the  re- 
covery of  any  claim  by  virtue  of  this  jiolicy  sliall  be 
sustained  in  any  court  of  law  or  equity  in  tins  siate, 
unless  commenced  within  two  years  froin  tlie  time  the 
loss  occurred.”  ' 

R.  L.  Minn.  1905,  Section  1G40. 

In  Sch'uffcr  v.  Rockford  Insurance  Co.,  77  Minn.  291, 
it  is  said : 

^‘Most  of  the  authorities  cited  hy  counsel  are  mere- 
ly to  the  effect  that  an  appraisal  of  tlie  amount  of  the 
loss,  if  not  waived,  is  a condition  precedent  to  the 
right  to  bring  an  action  to  recover  for  the  loss.  No- 
body disputes  tliat  proposition.” 

Like  total  loss  by  fire,  deatli  might  be  so  regarded  here. 
The  employee  could-  be  relieved  of  certain  things  where  his 
loss  was  total.  Provision  that  others  could  make  his  proofs 
where  incapacitated  or  incompetent  could  be  added.  Arbi- 
tration by  a regular  state  tribunal  could  be  provided  as  a 
condition  to  suit,  and  the  award  filed  as  a basis  for  a judg- 
ment. 

A law  leaving  the  general  question  of  liability  to  be  de- 
terfnined  and  s.imply  proinding  a reasonable  method  of  es- 
timating and  ascertaining  the  amount  of  the  loss  is  un- 
questionably valid. 

In  Viney  v.  Bignold,  L.  R.  20  Q.  B.  D.  172,  the  court 
said : 

*^Tn  the  present  case  the  insurers  have  covenanted 
to  insure  against  loss  by  fire,  subject  to  the  conditions 
indorsed  on  the  policy.  The  question  turns  on  the 
language  of  the  21st  of  these  conditions,  which,  after 
providing  for  the  adjustment  by  arbitrations  of  the 
amount  to  be  paid  by  the  insurers  in  case  of  a loss 
contains  this  provision,  ‘and  the  party  insured  shall 
not  be  entitled  to  commence  or  maintain  any  action  at 
law  or  suit  in  equity  upon  his  policy  until  the  amount 


of  the  loss  shall  have  ;been  referred  and  determined  as 
hereinbefore  provided,  and  then  only  for  the  amount 
so  awarded.’  The  question  to  be  decided  is  what  is 
the  meaning  of  this  provision?  I am  of  the  opinion 
that  it  means  that  in  case  of  difference  the  amount  to 
be  paid  sliall  be  determined  by  arbitration,  and  until 
this  is  done  no  liability  shall  arise;  in  short,  the  con- 
dition means  what  it  says;  tlie  only  contract  on  the 
part  of  the  defendants  which  is  applicable  where,  as 
in  the  present  case,  a difference  has  arisen  is  that  they 
will  pay  such  amount  as  shall  be  awarded  by  arbitra- 
tors or  their  umpire? 

Speaking  of  the  case  of  Collins  v.  Locke,  4 App.  Cas.  674, 
the  court  said : 

‘‘There  the  parties  had  agreed  to  two  things:  first, 
that  in  case  of  any  breach  of  covenant  the  party  com- 
mitting the  breach  should  pay  1000-1  as  liquidated 
damages,  and,  secondly,  that  all  matters  in  difference 
should  be  submitted  to  arbitrators.  The  second  of 
these  clauses,  under  tlie  particular  circumstances  of 
that  case,  was  held  not  to  interfere  with  the  right  to 
sue  for  breach  of  covenant.  At  first  sight  the  lan- 
guage of  the  arbitration  clause  in  that  case  appears 
similar  to  the  language  used  here,  but  there  is  a dif- 
ference, for  the  agreement  in  that  case,  after  provid- 
ing in  general  terms  for  a reference,  contained  the  fol- 
lowing clause : ‘And  the  award  of  the  arbitrators  shall 
be  conclusive,  and  any  of  the  parties  shall  not  be  en- 
titled to  commence  or  maintain  any  action  at  law  or 
suit  in  equity  in  respect  of  the  matters  so  submitted 
as  aforesaid,  except  for  the  amount  or  amounts  by  the 
said  award  determined  to  be  paid  by  any  one  oi  more 
of  the  said  parties  to  the  other  or  others  of  them,  or 
otherwise  in  accordance  with  the  terms  and  conditions 
of  the  said  award,  as  to  the  acts  or  deeds  to  be  made, 
done,  executed  and  performed.’  ” 

In  the  case  of  8coU  v.  Avery,  5 H.  L.  Cas.  811,  on  page 
847  the  Lord  Chancellor  said : 

- “There  is  no  doubt  that  where  a right  of  action  has 
accrued,  narties  cannot -by  contract  say  that  there 
shall  not  be  jurisdiction  to  enforce  damages  in  respect 


201 


of  iliat  riglit  of  action.  Noav  tliis  doctrine  depends 
-upon  I he  <:»’en(Tal  j)olicy  of  tlie  law,  tliat  parties  can- 
not enter  into  a contract  wliicli  j>ives  rise  to  a right 
(d'  action  for  tlie  brc^ach  of  it,  and  then  withdraw  such 
a cas(i  from  tlie  jurisdiction  of  tlie  ordinary  tribunals. 
]>ut  suiady  tliere  can  l)e  no  princii)le  or  ])olicy  of  the 
law  wliicli  j)revents  parties  from  entering  into  such  a 
contract  as  that  no  breach  shall  occur  until  after  a 
reference  has  been  made  to  arbitration.  It  appears 
to  me  that  in  such  cases  as  that,  tlie  policy  of  tlie  law 
is  left  untouched.’’ 

In  Prcs't,  etc.  7).  & JI.  Canal  Co.  v.  Pa.  Coal  Co.,  50  N. 

Y.  250,  it  is  said : 

“The  distinction  between  the  two  classes  of  cases  is 
marked  and  well  defined.  In  one  class  the  parties 
undertake  by  an  independent  covenant  or  agTeement 
to  provide  foi*  an  adjustment  and  settlement  ,of  all 
disputes  and  differences  by  arbitrations,  to  the  exclu- 
sion of  the  co-urts,  and  in  the  other  they  merely,  by  the 
same  agTeement  Avhich  creates  the  liability  and  gives 
the  right,  qualify  the  right  by  providing  that  before  a 
right  of  action  shall  accrue  certain  facts  shall  be  de- 
termined or  amounts  and  values  ascertained,  and  this 
is  made  a condition  precedent  either  in  terms  or  by 
necessary  implication.” 

And  further: 

Scott  V.  A very,  (5'  H.  of  Lords  Cases,  811)  is  in 
principle  on  all  fours  Avith  the  case  at  bar,  and  unless 
we  are  prepared  to  overrule  or  disregard  it,  is  decis- 
ive. That  was  an  action  on  policies  of  insurance,  one 
of  the  conditions  of  Avhich  was  that  the  sum  to  be  paid 
for  loss  should,  in  the  first  instance,  be  ascertained  by 
the  committee,  but  if  a difference  arose  between  the 
insured  and  the  committee,  the  difference  was  to  be 
referred  to  arbitration  in  a AAmy  pointed  out  by  the 
conditions,  with  a.  proviso  that  no  one  who  refused 
to  accept  the  amount  settled  by  the  committee,  should 
be  entitled  to  maintain 'an  action  at  law,  or  suit  in 
equity  on  his  policy  until  the  matter  had  been  decided 
by  arbitration,  and  then  only  for  such  sum  as  the  ar- 
bitrators should  award.  It  was  held  that  these  con- 


202 


ditions  were  lawful,  and  until  the  award  was  made  no 
actiou  was  maintainable.  The  House  of  Lords  affirm- 
ed the  judgment  of  the  Court  of  Exchequer  Chamber, 
reversing  that  of  the  Court  of  Exchequer.  There,  as 
in  this  case,  in  the  language  of  Lord  Campbell,  the 
rules  and  regulations  for  ascertaining  the  amount  to 
be  paid  made  part  of  the  contract,  and  it  is  not  ma- 
terial that  there  the  contract  was  express  tliat  no 
action  should  be  brought  until  after  the  award,  while 
in  the  contract  before  us  it  is  implied.  It  is  not  nec- 
essary that  it  should  be  put  in  the  technical  form  of  a 
^condition  precedent,’  and  the  courts  will  give  effect 
to  the  real  intention  of  the  parties,  as  clearly  indicated 
by  the  agTeement.” 

In  Wolff  i\  Liverpool  L.  k G.  Ins.  Co.,  50  X.  J.  L.  453, 
the  court  said : 

‘d)ut  the  present  case,  plainly,  stands  outside  of 
that  class,  for  here  the  stipulation  to  refer,  instead  of 
being  independent  of  the  promise  to  pay  the  loss,  is 
attended  with  the  further  stiinilaticn,  that  until  such 
appraisal,  such  payment  shall  not  be  due.  Such  a 
provision  qualifies,  and  consequently  incorporates  it- 
self with  the  general  promise  to  pay  the  loss.  It  is 
clear,  beyond  all  possibility  of  controversy,  that  the 
* agreement  between  the  assured  and  the  company  was, 
that  if  they  could  not  agree  on  the  amount  of  the  loss, 
the  sum  recoverable  should,  if  an  arbitration  were  re- 
quested, be  the  amount  found  by  the  award.  Such 
an  agTeement  is  both  legal  and  reasonable,  and  it  is 
not  perceived  that  any  authority  exists,  which  holds 
a contrary  doctrine.” 

In  Hall  V.  Xcn'ivalk  Fire  Ins.  Company.  57  Conn.  105, 
it  is  said : 

^*If  parties  make  an  arbitration  agTeement  which 
has  the  effect  to  oust  the  courts  of  jurisdiction,  it  is 
held  to  be  invalid,  (although  more  recent  decisions 
questions  whether  this  doctrine  is  sound  in  principle,) 
but  it  has  always  been  held  both  by  the  courts  of  Eng- 
land and  of  the  United  States,  that  arbitrations  to  set- 
tle particular  questions  which  are  auxiliary  to  the 
jurisdiction  of  courts,  such  as  the  amount  of  damages. 


203 


or  liio  amount  of  tlm  loss  by  fire  niulor  ]Tolieies  of  m- 
siiraure,  aro  binding  in  la^v,  and  indeed  highly  fa- 
A'ored  by  eonrts.’- 

In  Real  r.  Washington  Insurance  Co.,  138  ^lass.  572, 
the  court  said  : 

“There  is  no  donbt  that  an  apiiraisal  of  value,  or 
an  award  of  the  amount  of  damages,  can  l>e  made  a 
condition  iirecedent  to  a right  of  action.  In  such  a 
case  the  agreement  is  not  to  refer  a cause  of  action, 
but  that  a.  cause  of  actiim  shall  arise  upon  the  ap- 
praisal or  award,  which  is  ])reliminary  to,  and  in  aid 
and  a condition  of,  the  right  of  action.  Hood  v. 
Harfsliorn,  100  [Mass.  117,  was  a case  of  that  kind. 
Chief  Justice  Chainnan  said;  ‘The  ]>resent  case  comes 
within  the  ]U'inciple  stated  by  Coleridge,  J.,  in  Avery 
r.  Scoff,  8 Exch.  500,  that  it  is  iiot  unlawful  for  par- 
ties to  agree  to  impose  a condition  precedent  with  re- 
spect to  the  nuHte  of  settling  the  amount  of  damages, 
or  the  time  of  paying  it,  or  any  matters  of  that  kind 
that  do  not  go  to  the  root  of  the  action.’  The  judg- 
ment of  C deridge,  J.,  in  the  Exchequer  Chamber,  in 
Averif  V.  Scoff,  was  affirmed  in  Scoff  r.  Avery,  5 H.  L. 
Cas.  811,  and  the  question  in  such  cases  has  been  one 
of  the  construction  of  contracts — whether  the  agree- 
ment to  refer  in  the  particular  contract  under  consid- 
eration is  a condition  precedent  to  a right  of  action 
upon  the  contract,  or  an  agTeement  to  refer  a right 
arising  under  the  other  provisions  of  the  contract.” 

In  Ham  iff  on-  i\  The  Liverpool  & London  k Globe  Insiir^ 
once  Co.,  13G  U.  S.  212,  31  L.  Ed.  119,  it  is  said : 

' “The  appraisal,  when  requested  in  vunting  by  either 
party  is  distinctly  made  a condition  precedent  to  the 
payment  of  any  loss,  and  to  the  maintenance  of  any 
action. 

^‘Such  a stipulation,  not  ousting  the  jurisdiction  of 
the  courts,  but  leaving  th^  general  question  of  liabil- 
ity to  be  judicially  determined,  and  simply  providing 
a reasonable  method  of  estimating  and  ascertaining 
the  amount  of  the  loss,  is  unquestionablv  valid,  ac- 
cording to  the  uniform  current  of  authority  in  Eng- 
land and  in  this  country.  Scoff  v.  Avery,  5 H.  L. 


204 


Cases,  811;  Viney  v.  Bignold,  L.  R.  20  Q.  B.  Div.  172; 
Delauxire  & H.  Canal  Co.  v.  Pennsylvunia  Coal  Co., 
50  X.  Y.  250;  Reed  v.  Washington  Fwe  & M.  Ins.  Co., 
138  Mass.  572-0;  Wolff  v.  Liverpool  & L.  & G.  Lis.  Co., 
50  X.  J.  L.  453;  Hall  v.  Norivalk  F.  Ins.  Co.,  57  Conn. 
105,  114. 

This  might  be  done  here. 

The  injured  AA’onld  be  entitled  to  appear  before  the  arbi- 
trators and  submit  evidence  of  his  cause.  Rediver  v.  N. 
Y.  Ins.  Co..  92  Minn.  300. 

The  arbitrators  would  be  disinterested. 

Produce  Refrigerator  Co.  v.  Ins.  Co.^Dl  ^linn.  210. 

The  arbitrators  would  sit  in  a bod}’  and  be  governed  by 
the  rules  of  common  law  arbitrators  making  their  acts 
quasi  judicial  but  without  so  many  technicalities  as  in  a 
law  suit. 

See  cases,  supra. 

Christianson  v.  XoncicJi  Union  Fire  Ins.  Co.,  84  Minn. 

520-530. 

In  the  last  case  it  is  said : 

‘‘The  board  of  referees  provided  for  under  the 
standard  policy  is  a quasi-court  subject  to  the  princi- 
ples governing  common  law  arbitration.  Such  board 
should  sit  in  a body,  and  receive  evidence  offered  by 
the  respective  parties,  submitting  the  same  to  the 
usual  tests  of  cross  examination.  While  its  individu- 
al members  are  prohibited  from  privately  collecting 
evidence  from  different  sources,  a reasonable  latitude 
is  allowed  them  in  the  examination  of  the  premises, 
remnants  of  goods,  and  causes  of  the  fire,  for  the  pur- 
pose of  better  understanding  and  Aveighing  the  evi- 
dence on  the  principal  question  before  them,  viz., 
what  is  the  just  damage  to  the  property  involved? 
Jlut,  v/hile  a certain  liberality  is  permissible  in  ac- 
quainting themselves  with  the  circumstances  sur- 
rounding the  fire  Avithout  the  medium  of  witnesses. 


205 


sm*li  board  is  not  soloctod  for  the  purpose  of  seeking 
evidence  secretly,  and  deterniininu:  the  ainonnt  of  tin* 
loss  by  reason  of  such  personal  knowledj’e.  See  au- 
thorities cited  in  2 Am.  k Eng.  Enc.  (Ul-055.  This 
court  has  practically  stated  tlie  rule  in  Moi^ncss  v. 
German  America)!  7a, Co.,  50  ]Minn.  341,  52  X.  W. 
932.  The  referees  innst  constitute  a body  of  disinter- 
ested men,  whose  business  it  is  to  ]U’oceed  in  a judicial 
and  impartial  manner  to  ascertain  the  facts  in  con- 
troversy.” 

Indeed,  the  last  session  of  the  Minnesota  legislature 
(Chap.  167,  G.  L.  1909)  provided  for  health  and  accident 
policies;  it  also  created  onr  commission  to  investigate  this 
question. 

As  evidenced  by  its  decisions  hereinbefore  cited  the  Su- 
preme Court  of  the  United  States  has  recognized  the  right 
to  control  insurance  problems  by  limiting  and  defining  the 
rights  of  the  parties.  Indeed  the  question  is  no  longer 
open  as  to  fire  insurance  and  if  it  were  a question  of  in- 
juries to  mules  or  machines  insteal  of  men  there  would  be 
no  doubt  of  the  right. 

There  is  no  reason  to  deny  the  right  to  men. 

XIII. 

THE  FALLACY  IX  THE  MOST  OF  OFF  OBJEC- 
TIOXS  LIES  IX  THE  FACT  THAT  WE  FAIL  TO  UX- 
DERSTAXD  OR  APPRECIATE  THE  WEIGHT 
WHICH  MUST  BE  GITEX  TO  THE  POWER  TO  PRO- 
TECT THE  PUBLIC  IXTERESTS.  THE  POWER  OF 
GEXERAL  WELFARE  MUST  ALWAYS  REMAIX 
WITH  THE  STATES  SUBJECT  OXLY  TO  REASOX- 
ABLE  AXD  LAWFUL  REGULATIOXS. 

A review  of  the  origin  and  history  of  our  constitutional 
system  is  suflicient  without  much  reflection  to  convince  the 


20G 


observing  mind  that  our  constitutional  problems  here  are 
more  imaginary  than  real.  The  difficulty  lies  not  witii  the 
constitution  but  in  the  prejudicial  awe  with  wliich  we  ap- 
proach it.  It  was  made  not  to  rule,  but  to  serve;  to  pro”^ 
tect,  not  to  prohibit ; to  secure,  not  obstruct. 

It  was  the  result  of  a revolution  in  the  common  law;  it 
intended  to  prohibit  and  prevent  the  evils  and  hardsliips 
then  known;  to  reasonably  secure  the  future.  The  Anglo 
Saxon  was  a progressive  people.  The  colonists  did  intend 
to  protect  individual  rights,  but  above  all,  in  their  govern- 
ment, they  wanted  liberty’ — not  license.  The  state  was 
first,  after  that  individuals. 

The  fallacy  in  the  most  of  our  objections  lies  in  the  fact 
that  we  fail  to  understand  or  appreciate  the  weight  which 
must  be  given  to  tlie  power  to  protect  the  public  interests 
in  all  controversies  between  individuals.  This  is  a power 
ever  present,  never  lost;  it  cannot  be  sold  or  bartered;  all 
property  is  held  subject  to  its  power  of  reasonable  regula- 
tion and  control.  It  is  a condition  precedent  to  all  con- 
tracts; a safety  valve  for  all  action;  a supreme  factor  in  all 
private  law.  There  are  other  rules  with  which  and  to 
which  it  must  conform  but  even  those  rules  are  blended  to 
protect  the  public  so  long  as  no  distinction  is  made  to  work 
unjust  and  discriminating  hardship. 

The  state  must  be  first  protected  and  reasonable  latitude 
is  allowed  for  that  protection  as  based  on  the  equities  of 
the  case. 

We  yield  to  none  in  our  appreciative  reverence  for  the 
American  constitutional  system;  yet  there  is  a higher  and 
broader  patriotism  than  the  one  with  v.diich  that  Consti- 
tution is  often  approached.  It  is  a fundamental  law — or- 
ganic, yet  reasonable;  broad,  yet  blending;  restrictive,  yet 
expansive.  And  the  broader  view  of  it  is  that  private  in- 


i 


207 


dividiials  must  hold  their  property  and  liberty  subject  to 
such  reasonable  laws  as  the  public  necessity  creates. 

None  can  know  history  and  not  ax>preciate  the  exigen- 
cies which  gave  birth  to  the  bill  of  rights;  yet  none  can 
know  jurisprudeijce  and  not  understand  that  there  is  a 
X>ublic  right  greater  and  broader  than  individual  rights 
Avhicli  must  have  greater  and  broader  jiower  for  its  pro- 
tection and  use.  Indeed,  the  very  fact  that  bills  of  rights 
are  deemed  necessary  at  all  is  based  upon  the  theory  that 
the  state  would  otherwise  have  power  to  disregard  them. 
This  being  true  we  look  to  the  form  of  government  to  see 
from  whence  comes  the  protection  for  general  welfare. 
What  do  we  find?  That  certain  powers  have  been  dele- 
gated to  the  Federal  government,  but  not  the  xiolice  power 
within  the  states.  Certain  prohibitions  are  delegated  to 
the  Federal  government  to  prevent  the  states  from  violat- 
ing certain  bills  of  rights,  but  aside  from  these  the  power 
is  reserved,  and  even  within  them  it  exists  excex>t  as  lim- 
ited by  the  x)rovisions  above  discussed  as  to  police  iDOwer 
and  ill  the  language  of  the  United  States  Supreme  Court : 

state  has  the  same  undeniable  and  unlimited 
jurisdiction  over  all  persons  and  things,  within  its 
territorial  limits,  as  any  foreign  nation — ^the  author- 
ity of  a state  is  complete,  unqualified  and  exclusive.’’ 

Equal  legal  protection  can  easily  be  secured  in  x>olice 
rights;  so  can  due  process  of  law.  Neither  confiscation  of 
property  nor  the  destruction  of  liberty  follows  from  reason- 
able regulations,  for  the  power  is  ever  present  and  all 
rights  of  property  held  subject  to  it. 

The  allegiance  granted  in  consideration  for  x>rotection 
implies  this  regulation.  The  Constitution  is  an  instru- 
ment for  protection  of  public  welfare  as  well  as"^  private 
rights.  If  the  government  could  not  x^reserve  the  general 


208 


welfare,  it  would  be  but  an  instrument  for  license  as  dis- 
tinguished from  liberty.  The  Constitution  was  never  in- 
tended to  prevent  but  rather  to  secure  government.  It  Ava,s 
not  intended  to  deprive  all  men  of  protection,  except  the 
one  whose  rights  are  particularly  called  in  question,  but 
rather  to  leave  the  scheme  of  public  protection  without 
much  substantial  alteration  so  long  as  operated  in  good 
faith  and  equally;  and  to  protect  the  individual  against  ar- 
bitrary, unusual  and  unreasonable  restraint. 

The  power  to  protect  tliis  general  wCfare  is  iiilu^reiit  in, 
and  remains  with,  the  states,  subject  only  to  c(iual  and  rea- 
sonable lawful  regulation. 

To  secure  individual  liberty  restraints  on  public  rights 
are  necessarj^,  but  to  preserve  common  liberty,  including 
individual  liberty,  restrictions  on  individual  riglits  are  im- 
perative. 

Construing  the  constitutions  then,  in  the  light  of  their 
creation  and  objects  we  find  nothing  preventing  tliis  public 
security,  but  only  that  protection  necessary  for  the  indi- 
vidual security  co-ordinate  with  the  public  Avelfare. 

Since  the  first  ten  Amendments  do  not  apply  to  state  ac- 
tion, and  the  Fourteenth  Amendment  does  not  interfere 
with  reasonable  state  action  through  the  police  power,  wo 
find  but  small  limitations  in  this  regard. 

The  state  has-never  given,  granted  or  bartered  its  police 
power  to  any  one — it  cannot  do  so.  This  being  true,  no 
person  can  set  up  a vested  rigiit  against  the  regulation; 
none  can  claim  injustice  on  account  of  it;  no  constitution^ 
al  provision  can  be  construed  to  prevent  it — else  that  pro- 
visiou,  if  clear,  Avould  abrogate  this  power  of  the  state  that 
must  ever  stand  as  the  bulwark  of  constitutional  security. 

Since  no  individual  ever  acquires  this  public  right;  since 
no  property  is  based  upon  it,  but  all  held  subject  to  it,  the 


209 


state  does  not  take  projierty  l)j  its  exercise.  It  may  be 
tliat  the  poAver  to  exercise  has  ])een  dormant;  tliat  its  exer- 
cise seems  a taking;  bnt  it  is  in  fact  but  an  assumption  of  a 
right  always  implied  and  always  subject  to  exercise.  It  is, 
therefore,  not  a damaging  to,  or  taking  of,  property  of  tlie 
individual — it  is  the  assumption  of  a riglit  which  for  fail- 
ure to  claim  the  individual  may  iiave  used  to  his  own  ad- 
vantage, but  cliarged  with  the  knowledge  of  its  true  own- 
' ership. 

The  present  basis  of  fault  is  wrong  in  principle;  insuffi- 
cient in  practice. 

With  the  experience  of  the  more  important  foreign  coun- 
tries committed  to  the  doctrine  of  the  change  of  basis ; Avith 
the  recognized  necessity  in  a number  of  states  to  attempt  to 
make  the  change;  with  the  present  conditions  admittedly 
unsatisfactory;  with  the  Supreme  Court  of  the  United 
States  committed  to  uphold  laws,  making  some  changes 
within  the  police  power;  and  with  two  of  the  most  noted 
presidents  officially  pointing  with  humiliation  to  our  ob- 
solete system,  a third  having  publicly  acted  upon  it ; with 
all  other  financial  risks  of  the  industries  rightfully  as- 
stimed  by  the  employer;  with  the  risk  of  pain  and  suffering 
unavoidably  cast  upon  the  employee ; can  anyone  doubt  the 
necessity  of  correcting  this  condition  or  the  propriety  of 
changing  the  basis  of  recovery  from  that  of  fault  to  that 
of  risk  of  the  industry — on  a fair  limit  to  both  parties. 

With  all  this,  and  more  history,  it  is  apparent  that  the 
movement  is  based  upon  reason — not  arbitrary  action.  It 
would  have  been  exceedingly  easy  for  many  states  to  have 
passed  laws,  if  arbitrary  laws  would  have  done,  but  the  ac- 
tion of  these  states  as  well  as  the  Atlanta  City  Conference 
conclude  all  question  of  arbitrary  action.  It  is  no  move- 
ment having  the  police  power  as  a mere  cloak,  and  no 


210 


court  can  ever  say — unless  it  say  arbitrarily — that  the 
inovenient  was  not  without  consideration  or  reasonable 
basis. 

It  is  a notable  fact  that  while  we  have  been  boasting  of 
our  elaborate  system  of  American  constitutional  and  pri- 
vate law,  some  of  the  foreign  countries,  a few  of  which  like 
'to  put  it  that  they  are  unhampered  by  constitutional  lim- 
itations, have  been  seeking  to  enact  laws  to  right  this  evil, 
and  many  of  them  think  that  they  have  succeeded  along  the 
lines  above  indicated. 

We  were  the  first  in  modern  times  to  adopt  a successful 
written  constitution  in  the  sense  of  a fundamental  law 
that  should  under  all  circumstances  be  supreme  to  all  oth- 
er private  laws.  But  from  our  constitutional  system  the  or- 
organic  act  of  Canada,  the  constitution  of  Australia,  the 
constitutiouvs  of  the  Central  and  South  American  Republics, 
of  Mexico,  of  Norway  and  Sweden,  of  Prussia,  of  Italy,  and 
many  of  the  other  European  countries  copied  niucli ; in  sub- 
stance, if  not  in  form,  although  some  of  them  are  theoreti- 
cally built  upon  granted  power  from  the  Rulers.  It  would 
be  surprising,  if  not  humiliating  now  if  we  should  permit 
those  countries  to  take  from  us  a very  large  portion  of  the 
best  of  our  constitution  and  yet  reserve  to  themselves  the 
right  to  dispose  of  evils  which  we  cannot  overcome  by  rea- 
son of  our  constitutional  limitations. 

If  Ave  understand  the  facts  correctly,  there  have  been  in 
single  years  recently  as  high  as  an  average  of  one  man 
killed  or  crippled  on  every  21  miles  of  single  track  railroad 
in  the  United  States.  Counting  the  family  at  five,  you 
could  hang  tAVO  members  of  the  family  on  eA^ery  mile  post 
of  eA^ery  single  track  railroad  for  the  injuries  receWed  di- 
rectly affecting  them,  in  that  occupation,  in  a single  year. 
Indeed,  the  records  of  a recent  year  sIioav  approximately 


211 


51  times  as  many  men  killed  and  injured  in  the  i)eacefni 
pursuit  of  railroadinii,'  as  were  killed  and  injured  on  the 
Union  side  in  the  dano-erons  oeenpation  of  war,  at  the  bat- 
tle of  Oettysbnri*’.  Probably  ime  half  million  men  are 
X>artial  victims  of  the  industries  of  this  comity  annual- 
ly. It  would  indeed  be  a striking  and  sad  commentary'on 
civilization  if  we  could  not,  or  would  not,  legislate  to  right 
this  wrong  in  some  way  that  can  be  found. 

Xow  is  it  an  abuse  of  discretion  to  say  that  such  legis- 
lation is  necessary  in  substantially  all  the  countries  of 
Europe?  Have  all  those  countries  acted  arbitrarily  upon 
the  question?  It  has  not  been  the  lot  of  i)easantry  to  be  es- 
pecially favored,  unless  there  be  motive  for  that  favor. 
Xeither  has  it  been  the  lot  of  labor  in  this  country  to  exer- 
cise nnnecessary  special  privileges. 

When  the  risk  of  building  a railroad  was  considered  too 
great  for  private  enterprise  the  government  assumed  it. 

When  the  state  had  created  a system  of  railroads  too 
powerful  for  private  negotiations  it  created  a railroad  and 
Avarehonse  commission  to  counter-balance. 

AVlieu  the  government  found  that  private  citizens  and  its 
courts  could  not  promptly  handle  the  interstate  commerce 
problem  it  created  a commission  to  simplify  the  process. 

When  the  states  liaA^e  found  priAate  enterprise  unable 
to  hold  agricultural  shows  they  have  created  public  funds 
for  general  good. 

When  they  haxe  found  private  education  inadequate  to 
meet  public  demands  they  have  created  great  educational 
systems  and  institutions;  but  only  recently  have  they 
aAvakened  to  the  great  fact  that  provision  for  mechanics 
and  artisans  and  protection  for  their  employers  is  as  neces- 
sary to  the  j)eople  and  as  just  an  obligavion  of  die  state  as 
are  all  these  things. 


212 


aONCLLl^ION. 

I. 

Public  work  is  not  controlled  by  the  constitutional  rule 
as  to  freedom  of  contract. 

II. 

The  relations  of  the  people  to  the  governments  of  the 
United  States  and  of  the  several  states  are  based  upon 
contract  to  which  individual  rights  are  enough  subjected 
to  protect  the  general  welfare,  at  least  under  the  police 
power. 


' III. 

The  commerce  clause  of  the  Federal  Constitution  grants 
to  Congress  the  right  to  control  relations  of  master  and 
servant  in  so  far  as  needed  in  such  commerce,  but  does 
not  grant  to  the  Federal  Government  the  right  to  deprive 
the  state  of  its  police  power  or  to  regulate  state  com- 
merce. 

(a)  The  commerce  clause  was  not  intended  to,  and  does 
not,  take  away  the  police  power  of  the  states. 

(b)  The  states  execute  the  police  power  even  with  re- 
spect to  interstate. commerce  but  do  so  only  for  their  self 
protection  and  only  to  such  extent  as  not  to  amount  to 
regulation  in  the  constitutional  sense. 

IV. 

The  police  power  of  the  people  of  the  several  states  was 
never  delegated  by  the  Federal  Constitution  to  the  na- 
tional government,  nor  prohibited  by  that  instrument  to 
•the  states. 


213 


(a)  The  Fourteenth  Amendment  was  not  designed  to 
destroy  the  state's  police  power. 

V. 

Some  of  tlie  usual  constitutional  objections  against  laws 
are  not  applicable  to  this  question  for  they  do  not  apply 
to:  tlie  state  if  it  stays  Avithin  reasonable,  equal,  and  law- 
ful regulations  of  dangerous  employments. 

(a)  Tlie  first  ten  amendments  to  the  Federal  Constitu- 
tion apply  only  to  the  Federal  Government  and  do  not  re- 
quire the  states  to  giA-e  the  jury  trial  but  probably  AAmuld 
require  such  trial  in  the  Federal  Courts,  Avhere  they  have 
jurisdiction. 

VI. 

The  Fourteenth  Amendment  to  the  Federal  Constitu- 
tion is  a prohibition  upon  the  states — not  ujjon  the  na- 
tional government. 

(a)  The  privileges  and  immunities  secured  by  that  in- 
strument are  those  which  belong  to  citizens  of  the  United 
States  as  distinguished  from  citizens  of  states. 

(b)  Equal  protection  of  the  laws  is  construed  by  the 
hVderal  'Courts  as  it  is  by  the  state  courts  to  permit  rea- 
sonable classifications  treating  those  within  the  class 
ccjually.  This  is  no  bar  to  such  law. 

( c ) The  due  process  of  law  provided  by  the  Fifth 
Amendment  applies  only  to  the  Federal  Government  but 
in  the  Fourteenth  Amendment  it  is  a prohibition  upon  the 
states. 

(d)  The  Federal  Constitution,  however,  does  not  con- 
trol mere  forms  of  procedure  in  or  regulate  the  practice 
c^f  state  courts.  All  that  it  requires  is  that  at  some  point  • 


214 


in  the  controversy  there  must  be  a time  and  place  for  the 
court  to  adjudicate  the  legal  liability  after  fair  hearing. 

(e)  It  is  not  taking  private  property  without  due  pro- 
cess of  law  within  the  constitutional  provisions  to  require 
dangerous  employments  to  be  liable  for  the  risks  of  the 
inj  ury  without  any  particular  fault  in  the  special  transac- 
tions. 

(f)  The  jury  trial  provided  by  the  state  constitutions 
is  the  trial  of  such  cases  as  embrace  principles  secured  by 
the  constitution  when  it  was  adopted  and  not  a trial  of 
matters  involved  only  in  neAV  laws  such  as  this  would  be. 

VII. 

This  sort  of  law  would  not  take  private  property  for 
public  use  by  reason  of  two  principles. 

(a)  Under  our  social  compact  the  private  owner  has 
no  ownership  except  that  which  is  subject  to  reasonable 
control  such  as  this  would  be. 

(b)  The  private  individual  has  no  right  to  complain 
of  the  taking  of  only  so  much  property  as  is  an  aid  to  gov- 
ernment operation  by  reason  of  the  last  above  principle. 

VIII. 

The  Fourteenth  Amendment  secures  the  liberty  of  con- 
tract between  employer  and  employe  except  when  limited 
by  the  police  power ; the  exercise  of  the  police  power  rests 
in  the  legislative  department;  the  courts  interfere  to  up- 
hold the  constitution  only  to  prevent  arbitrary  power  from 
being  exercised  under  cover  of  the  police  power. 

(a)  The  courts  recognize  that  the  employer  and  the 
employe  do  not  stand  on  an  equality  in  making  their  con- 
tracts. 

(b) ,The  police  power  is  used  to  regulate  insurance  of 


215 


private  property  and  tlie  control  of  employer  and  em- 
/ploye. 

(c)  No  owner  of  property  has  the  right  to  claim  that  a 
contract  previously  in  existence  has  been  changed  in  its 
obligations  by  reason  of  the  exercise  of  the  police  power 
because  the  implication  of  the  power  always  went  with 
that  contract  as  a matter  of  law. 

(d)  The  police  power  can  neither  be  legislated  nor  con- 
tracted away. 

IX.  . 

The  action  of  the  state  must  not  be  arbitrary. 

(a)  The  common  law  was  not  made  to  meet  the  present 
conditions  and  is  totally  inadequate  therefor. 

(b)  The  law  on  this  question  has  not  kept  apace  with 
industry. 

(c)  The  employe  carries  this  risk  now. 

(d)  It  is  a great  temptation  to  perjury. 

(e)  The  employer  not  satisfied. 

(f)  It  is  insufficient  to  protect  the  public. 

X. 

The  compensation  in  the  modern  foreign  countries  is 
along  this  line. 

(a)  What  advance  has  been  made. 

(b)  The  common  law  has  been  modified  in  many  re- 
spects and  there  seems  to  be  no  reason  why  it  should  not 
be  repealed,  at  least  after  a reasonable  remedy  is  given  in 
its  stead. 

(c)  The  Federal  Government  and  many  of  the  states 
have  been  working  in  this  change  sufficient  to  show  that 
no  party  wants  arbitrary  action  but  only  reasonable  reg- 


216 


ulation,  yet,  there  are  doubts  in  the  minds  of  many  as  to 
whether  we  can  make  the  necessary  laws. 

XI. 

The  simplest  remedy,  already  well  justified  for  property 
insurance,  is  to  fix  a definite  liability  by  law  for  hazardous 
industries  on  condition  that  the  amount  of  damages  be 
submitted  to  arbitration — repeal  the  common  law. 

XII. 

The  fallacy  in  the  most  of  our  objections  lies  in  the  fact 
that  we  fail  to  understand  or  appreciate  the  weight  which 
must  be  given  to  the  power  to  protect  the  public  interests. 
The  power  of  general  welfare  must  always  remain  with 
the  states  subject  only  to  reasonable,  equal  and  lawful 
regulations. 


REMEDY. 

There  would  seem  to  be  no  good  reason  why  the  legisla- 
ture could  not  make  a simple  and  adequate  remedy  along 
the  following  lines : 

(a)  Fix  a definite  legal  liability  instead  of  the  common 
law  in  hazardous  employment.  Either  require  the  em- 
ployer to  pay  all,  or  the  greater  part,  and  the  employe  to 
pay  an  equitable  proportion,  of  the  carrying  charges. 

(b)  Establish  a board  of  awards,  arbitration  or  refer- 
ence where  prescribed  forms  of  procedure  could  be  liber- 
all}^  interpreted,  and  simply,  quickly  and  inexpensively 
tried  to  fix  the  amount  of  damages  as  a condition  prece- 
dent to  recovery  and  which  as  to  amount  would  be  final. 

(c)  Allow  appeal  to  regular  courts  only  to  show  want 
of  jurisdiction,  fraud  in  arbitrators  or  question  legal  lia- 
bility.^ 


217 


The  Chairman  : The  average  workman  mav  feel  ihat  he 

has  a gamble  in  this  kind  of  case,  just  as  in  a lottery,  to 
£ret  a very  heavv  verdict.  If  he  understood  what  a small 
percentage  finaly  got  to  the  family,  if  he  understood  how 
much  discount  had  to  be  made,  if  he  understood  also  the 
number  of  cases  that  failed  utterly,  and  realized  that  his 
chance  of  getting  half  or  less  than  half  the  amount  of  those 
verdicts  was  very  light,  don't  you  think  it  would  do  a 
gi*eat  deal  to  change  his  ideas  on  that  matter? 

Mr.  Lyman:  There  is  no  question  about  that.  I was 

simply  speaking  on  the  lu’acticability  of  suggesting  a bill. 

TJtc  Chairman  : As  I said  this  morning,  we  are  going 

to  take  np  seme  tlionsands  of  accidents,  trace  them  down 
and  find  ont  how  mucli  was  paid  ao  each  family  and  what  it 
cost  to  get  tliat  ajnonnt.  From  what  I know  of  some  few 
hnndred  cases  that  Avere  investigated  a short  time  ago,  I 
think  the  result  will  be  A^ery  startling. 

Mr.  Stone  referred  to  a double  liability.  As  far  as  I 
have  talked  Avitli  representatiAes  of  AA^age  earners  they  are 
strongly  opposetl  to  any  legislation  that  Avould  Avipe  out 
the  old  common  law  doctrine.  It  think  that  there  is  a cer- 
tain amount  of  support  for  their  position.  I -don't  think 
a careful  employer  should  be  left  on  precisely  the  same 
basis  with  a negligent  employer.  I don't  think  the  law 
should  relieve  the  employer  from — you  might  say — the 
penalty  for  his  negligence.  We  start  on  the  assumption 
that  we  must  hold  the  employer  responsible  for  his  own 
neglect,  and  then  somewhat  illogically  say  that  he  is  re- 
sponsible for  the  negligence  of  the  next  man,  the  next  man, 
and  the  next  man ; AA’e  have  been  carrying  the  vice  principal 
doctrine  to  a point  Avhere  it  may  become  as  ridiculous  as 
the  old  fellow-.servant  doctrine.  Xow,  if  a workmen's  com- 
pensation act  with  a fixed  compensation  were  passed  on  the 


21S 


one  hand,  and  some  of  the  existing  niodifications  of  the  old 
common  law  doctrine  repealed,  and  then  within  narrow 
limits,  where  the  negligence  was  true  negligence  and  could 
be  attributed  to  the  employer  directl}^ — 

Mr.  Gillette:  Or  to  the  employee — his  own  gross  negli- 

gence? 

The  Chairman:  I am  speaking  of  the  point  of  double 

liability — would  it  not  eliminate  much  of  the  bases  of  liti- 
gation. If  you  limit  the  employee’s  right  to  sue,  that  is, 
if  you  'even  make  the  employer  more  responsible  than  now 
for  his  own  negligence,  but  reduce  the  number  of  vice  prin- 
cipals, thus  bringing  the  cases  for  suit  down  to  where  there 
is  actual  negligence  for  which  the  employer  should  be  pen- 
alized, wouldn’t  that  difficulty  disappear,  Mr.  Stone? 

Mr.  Stone:  The  difficulty  is  to  prove  the  fact.  That 

makes  a fight  at  once.  There  is  your  practical  difficulty. 

The  Chairman:  But  the  narrower  you  make  the  em- 

ployers’ liability,  the  less  reason  there  is  for  litigation. 

In  those  states  in  which  the  laws  are  rather  drastic  and 
in  which  the  old  common  law  has  been  largely  modified,  I 
am  wondering  whether  such  a campaign  could  not  be  car- 
ried on  as  would  induce,  as  a practical  proposition,  the 
representatives  of  the  labor  organizations,  or  the  wage  earn- 
ers, to  say  ^^we  are  in  favor  of  a workmen’s  compensation 
act;  we  also  want  the  right  to  sue,  where  there  has  been 
clear  negligence  on  the  part  of  the  employer;  but  we  will 
make  this  compromise — we  will  take  a workmen’s  compen- 
sation act,  and  waive  some  of  the  statutory  modifications 
of  the  common  law  which  extended  the  liability  of  the  em- 
ployer.” It  seems  to  me  that  along  that  line  lies  the  pos- 
sibility of  getting  together  and  getting  some  practical  sup- 
port which  would  secure  that  kind  of  legislation.  And 
if  you  limit  the  employers’  liability  more  and  more,  the 


219 


cases  that  could  arise  under  it  would  be  very  very  few. 
Xor  do  I think  it  desirable  in  this  country  to  get  away 
from  giving  a right  of  action  against  the  employer  for  exr 
treme  negligence  resulting  in  bodily  injury  or  in  the  loss 
of  human  life. 

Mr.  Parsons:  When  you  spoke  of  ‘dimiting**  the  em- 

ployers’ liability  more  and  more,  which  way  was  your  mind 
running?  Did  you  mean  to  increase  his  liability  or  di- 
minish it? 

The  Chairman:  When  I spoke  of  employers’  liability,  I 

meant  the  present  way  of  holding  him  liable  for  his  own 
negligence.  In  some  states  the  vice  principal  doctrine  has 
been  extended  to  cover  almost  everybody.  My  idea  is  to 
limit  it  more  and  more,  so  that  it  could  be  traced  to  a 
responsible  party;  to  take  it  back  more  nearly  to  the  old 
common  law  doctrine  before  it  was  amended  by  statutory 
enactments. 

Mr.  GiUette:  Xow  we  are  discussing  ‘^possibility.’’ 

There  are  only  one  or  two  employers  here.  I am  one  of 
them.  And  I will  say,  gentlemen,  frankly,  that  I don’t  be- 
lieve there  is  any  possibility  of  enacting  a workmen’s  com- 
pensation law  if  you  proceed  upon  that  theory.  I don’t 
know  a thing  about  New  York  or  Illinois  or  Wisconsin, 
but  I don’t  believe  a law  can  be  enacted  in  the  state 
of  Minnesota  that  is  not  reasonably  satisfactory  to  the  em- 
ployees and  reasonably  satisfactory  to  the  employers.  I 
don’t  believe,  at  this  stage  of  my  investigation  at  least,  that 
any  compensation  act  will  ever  be  satisfactory  to  the  em- 
ployers which  leaves  them  with  this  double  liability — and 
I don’t  believe  it  ought  to  be.  On  the  one  hand  you  have 
to-day,  as  I understand  it,  about  eleven  per  cent  of  recover- 
ies. You  attempt  to  create  an  absolute  liability  now  and  to 
compensate  the  other  eighty-nine  per  cent.  In  consideration 


220 


of  tliat  tlie  workmen  core  to  to  a, crept  the  compensa- 

tion naniecl  in  the  act.  To  my  own  mind  it  would  he  not 
only  manifestly  unfair  and  unwise  hut  ahsolutely  unjust 
to  subject  the  industries  of  any  giA^en  state  to  this  selfsame 
double  liability.  If  I thought  that  that  was  what  this 
movement  meant — ^to  maintain  something  of  that  kind,  I 
should  lose  very  much  ot  my  lieart  in  it.  I do  not  believe, 
Mr.  Chairman,  tliat  tliere  is  any  possibility  of  a workmen’s 
compensation  act  unless  it  is  approaciied  both  from  the 
standpoint  of  the  employer  and  the  employee,  with  a spirit 
of  yielding  and  of  compromising  and  of  doing  tliat  Avhich 
Avill  accomi)lish  the  greatest  good.  Inasmuch  as  over  fift}^ 
per  cent  of  those  who  are  injured  to-day  in  our  industrial 
undertakings  Avill  tlien  Ite  provided  Avith  accident  insur- 
ance, I believe  that  if  there  is  an  excessive  cost  under  that 
system  those  Avho  are  getting  that  accident  insurance  ought 
to  contribute  toAvard  it.  I belieA^e  that  there  are  many  rea- 
sons Avhy  that  element  ought  to  be  introduced  into  this  prop- 
osition. And  I say  that  if  you  approach  this  subject  entire- 
ly from  the  standpoint  of  the  student  of  sociology  or  from 
the  economic  standpoint  alone — ^to  you  gentlemen  Avho  have 
not  had  experience  in  industrial  occupations  I say  and 
I say  it  without  misgiving,  that  you  will  make  a very  great 
mistahe.  This  conference  to-day  is  charged  with  a most 
grave  responsibility.  It  is  initiating  a movement  Avhich 
may  possibly  not  only  be  statewide  hut  country-Avide.  And 
I say  that  if  you  do  anything  that  is  going  to  cripple  the 
industries  of  this  country,  possibly  it  were  better  that  the 
workmen  of  to-day  should  continue  to  suffer  the  injus- 
tices Avhich  I concede  in  some  respects  they  do  suffer,  than 
that  employment  be  taken  from  them  and  that  they  fly  int(^ 
the  hands  of  ills  they  knov/  not  of.  Personally  I believe 
that  this  question  is  possible  of  solution  along  sane 


221 


/ 


grounds,  but  I say  that  it  is  only  possible  of  solution  pro- 
vided the  gentlemen  who  are  liere  to-day  charged  Avitli  this 
responsibility,  approach  it  Avith  regard  not  only  to  the 
rights  of  one  but  to  the  rights  of  all,  and  that  if  you  at- 
tempt any  line  of  action  which  Avould  be  unjust  to  the  in- 
dustries of  the  country,  you  cannot,  in  my  opinion,  enact 
it  into  legislation — and  Amu  ought  not  to;  any  more  than 
you  ought  to  if  the  attempted  line  of  legislation  did  not 
meet  Avith  the  favor  of  the  employed  classes.  I do  not  like 
to  see  direction  given  to  this  meeting  Avhich  AVOuld  seem  to 
indicate  that  Ave  may  get  into  politics  and  pursue  a'  line 
of  action  Avhich  may  be  expedient  but  not  be  right;  because 
I do  not  believe  that  this  question  Avill  ever  be  settled  un- 
til it  is  settled  right,  and  it  cannot  be  settled  right  until  it 
is  settled  Avith  equal  justice  to  eAmry  interest  concerned. 

Mr.  Diiicso)i : Concerning  Avhat  may  be  ‘'^possible”  in  re- 

lation to  the  matter  immediately  under  discussion,  I AVOuld 
like,  first  of  all,  to  present  an  argument  the  facts  of  which 
do  not  appeal  to  me  but  Avhich  might  set  the  minds  of  Mr. 
Gillette  and  other  employers  at  rest  on  this  matter.  In 
Great  Britain  they  have  to-day,  as  they  would  have  in 
New  York  if  they  Avere  to  adopt  a Avorkmen’s  compensation 
act  Avithout  repealing  anything  else,  three  separate  methods 
of  recover}^ : One  under  the  old  common  laAV ; one  under 

• the  act  of  1880,  Avhich  is  more  liberal  than  any  act  in  the 
United  States  at  the  present  time  excepting  the  recent  con- 
gressional act ; and  one  under  the  workmen’s  compensation 
act.  The  Avorkman  may  take  his  choice.  I talked  Avith 
the  manager  of  the  Ocean  Accident  (a  former  client  of 
mine)  in  London,  and  found  that  it  Avas  his  opinion — and 
I liaA^e  understood  that  it  aa  as  the  opinion  of  other  men  in 
charge  of  insurance  companies  doing  business' there  (the 
Ocean  I believe  doing  one  of  the  largest  businesses  in  em- 


222 


ployers’  liability  insurance)  that  this  has  not  cut  much  fig- 
ure. There  have  been  a few  cases  where  there  were  em- 
barrassments of  annoying  litigation,  l)ut  tliey  liave  been 
rare  and  they  iiave  not  been  expensive.  I am  also  informed 
that  comparatively  few  liave  sued  under  the  common  law 
or  under  the  em'ployers’  liability  act  of  1880,  and  tliat  in 
p^oint  of  fact  there  has  appeared  to  be  no  occasion  for  the 
repeal  of  the  old  laws  or  for  stirring  up  any  trouble  over 
the  matter.  Now,  I have  stated  tliat  these  facts  do  not  ap- 
peal to  me.  The  British  law  on  the  whole  is  the  least  sat- 
isfactory in  Europe,  and,  in  my  judgment,  the  very  things 
that  we  are  discussing  comprise  some  of  the  unsatisfactor}^ 
features  of  that  law.  The  British  law  Avas  on  the  basis  of 
going  just  as  short  a distance  in  the  direction  'of  the  adop- 
tion of  the  correct  principle  as  possible.  They  accepted 
the  principle  of  workmen’s  compensation,  that  is,  that  a 
part  at  least  of  the  financial  loss  due  to  industrial  acci- 
dents should  fall  upon  the  workingmen;  the,y  practically 
fixed  the  percentage  at  fifty  per  cent  of  his  wages,  in  order 
that  he  might  only  get  half  the  benefit  and  therefore  the 
employer  suffer  only  half  the  loss.  They  fixed  the  lowest 
percentage  in  Europe,  and  the  least  satisfactory  percent- 
age. They  provided  for  a lump  sum  of  three  years’  wages, 
to  be  paid  in  one  lump,  Avhere  the  man  died.  The  present 
parliament,  if  they  continue  with  that  law,  is  practically 
certain  to  change  the  basis  in  regard  to  that.  We  spoke  of 
waste  this  morning.  I cannot  imagine  anything  that  is 
more  com|)letely  AA^asteful  than  to  provide  that  in  case  of 
death  a lump  sum  larger  than  the  family  ever  had  at  one 
time  before  should  be  given  to  them.  They  retain  the  old 
common  law  and  the  employers’  liability  act  of  1880  be- 
cause of  the  same  idea — ^that  there  might  be  larger  lump 
sums  collected.  They  permitted  the  employee  to  sue  under 


r 


223 

' , that  act  or  under  the  common  law,  and  in  case  he  did  not 
recover  they  gave  to  the  judge  in  that  very  proceeding  the 
right  to  give  him  his  benefits  under  the  workmen’s  com- 
pensation act.  In  other  words  all  he  lost  by  suing  was  the 
delay;  there  was  no  additional  expense.  They. did  discour- 
age the  bringing  of  suits  under  the  old  laws  by  two  things; 
one  was  that  the  man  could  get  the  workmen’s  compensa- 
tion benefit  virtually  immediately,  and,  in  general,  the 
workmen’s  families  needed  money  and  they  took  advantage 
of  that.  Another  discouragement  which  was  equally  prac- 
tical was  that  they  limited  the  amount  of  the  fee  that  at- 
, torneys  could  collect  in  these  cases.  If  a similar  limita- 
tion were  made  and  a similar  privilege  to  receive  immedi- 
ate benefit  under  a workmen’s  compensation  act  were  given 
in  our  oAvn  state  of  New  York,  I am  of  opinion  it  would 
have  very  much  the  same  effect  that  it  had  in  Great  Britain. 
I am  satisfied  that  if  in  New  York  City  the  sitting  judges 
were  able  at  any  point  in  a trial  to  make  up  their  minds 
that  it  should  be  taken  from  the  jury  and  an  award  made 
under  a workmen’s  compensation  act,  away  the  case  would 
go  from  the  jury;  and  the  lawyer  would  get  his  little  |10 
fee — if  that  Avas  the  amount  fixed  by  statute.  Practically, 
I don’t  think  that  the  question  whether  we  should  do  away 
Avith  the  old  employers’  liability  acts  or  Avith  the  common 
law  liability,  is  of  so  much  importance  as  employers  seem 
to  attach  to  it. 

The  Chairman:  If  a man  lost  his  case  and  had  to  ac- 

cept an  award  under  the  compensation  act,  wouldn’t  he 
have  to  accept  it  less  the  cost  of  the  litigation? 

Mr.  Daioson : Yes.  And  that  is  a practical  discourage- 

ment. 

Mr.  Gillette : It  occurred  to  me  that  if  there  is  to  be  a 

double  liability,  that  is,  a recoA^ery  under  a workmen’s  com- 
pensation act  and  the  right  to  sue  at  common  law,  it  should 


224 


be  considered  in  eillier  one  of  two  lij>‘lits;  tliat  eitlier  it  does 
cut  some  figure  and  adds  to  tlie  cost  of  insurance  wliere  in- 
surance is  carried,  or  that  tliere  are  large  recoveries  under 
it,  or  else  it  is  not  any  good  and  ought  not  to  exist.  How 
do  you  escape  from  that  ])osition? 

Daicson  ; Personally  T am  on  your  side  of  the  fence. 
Both  from  the  standpoint  of  what  legislation  we  can  get, 
and  from  the  standpoint  of  what  we  can  maintain  in  the 
courts  after  weihave  got  it,  if  it  is  possible  to  do  away  with 
the  old  common  law  theory  and  the  employers’  liability  act 
entirely,  I personally  think  tliat  should  be  done.  I am 
merely  saying  that  I do  not  think  it  is  so  important  a mat- 
ter that  if  it  ])roved  to  be  impossible  to  do  so  (either  on 
constitutional  grounds  or  on  the  severely  ]iractical  ground 
of  what  we  can  get  the  employers  and  the  labor  unions  and 
laboring  men  of  the  country  to  accept  at  this  time,)  that 
we  ought  to  abandon  our  efforts  to  y)ut  through  legislation. 
We  have  the  example  of  Great  Britain.  They  have  since 
amended  those  laws  twice,  in  Great  Britain,  and  at  neither 
of  those  times  have  thew  seriously  considered  doing  away 
with  the  employers’  liability  act  or  modifying  the  common 
law  rules.  It  has  been  considered  there  that  it  is  of  no 
practical  importance,  that  stirring  it  up  creates  dissension 
and  strife,  and  that  they  ought  to  leave  it  alone.  That  is 
the  reason  they  have  left  it  alone. 

4/r.  Gillette : I can  readily  conceive  that  there  might  be 

a very  small  number  of  suits  brought  at  common  law  as 
compared  with  the  total  number  of  accidents.  Still,  does 
it  not  influence  settlements?  In  other  words,  are  there  not 
a considerable  number  of  settlements  made  in  excess  of  the 
compensation  made  in  the  law,  to  avoid  litigation,  and 
consequently  the  cost  of  the  risk  materially  increased?'  Is 
it  not  true  also  that  the  Ocean  and  other  companies,  after 


225 


N 


their  experience  of  the  first  year  of  the  operation  of  the 
new  law,  were  obliged  tx>  increase  their  rates  nearly  “forty 
per  cent? 

Mr.  Datvson : They  have  increased  their  rates.  I do 

not  know  the  percentage.  I>iit  the  new  law  covers  a long 
list  of  occupational  diseases.  That  is  the  principal  reason 
of  that  increase.  So  far  as  the  other  part  of  your  question 
is  concerned,  to  the  best  of  my  recollection  (and  I will  ask 
Dr.  Frankel  to  correct  me  if  his  memory  is  different  from 
mine)  the  manager  of  the  Ocean  informed  us  that  the  com- 
pany did  not  consider  that  on  the  whole  that  was  of  any 
great  importance  in  any  way;  that  it  had  not  cut  any  great 
figure  at  all  either  in  settlements  or  in  suits.  The  suits 
had  fallen  from  perhaps  30  or  40  per  cent  of  the  cases  where 
accidents  occurred,  down  to  a 'fraction  of  one  per  cent,  so 
far  as  the  old  employers’  liability  act  was  concerned. 

Mr.  Gillette : That  does  not  show  tliat  it  has  not  influ- 

enced the  cost  in  settlements. 

Mr.  Datoson::^  I think  it  lias  to  some  extent,  although 
he  didn’t  feel  that  it  had  cut  any  great  figure,  as  I under- 
stood him. 

Now,  my  own  experience  in  dealing  with  private  indiv- 
iduals in  making  arrangements  for  the  protection  of  their 
employees  (and  I think  the  insurance  men  present  will 
bear  me  out  that  it  accords  with  their  experience  with  em- 
ployers). is  that  where  they  have  insurance,  as  a class  they 
desire  the  settlements  to  be  as  liberal  as  possible.  It  is  my 
impression  that  if  this  thing  can  be  worked  out  in  such  a 
manner  that  complete  and  full  and  fair  indemnity  would 
be  paid  in  such  form  that  it  would  be  most  useful  to  the 
workingman  and  his  fahiilyin  the  event  of  this  kind  of  dis- 
tress, the  desire  Tor  even  the  possibility  of  large  verdicts 
will  practically  die.  Under  the  British  system  of  offering 


22G 


only  tliree  years’  waj^es  in  the  event  of  the  death  of  the 
emplo^^ee,  payable  in  one  sum,  I am  not  astonished  at  his 
suing;  but  I cannot  conceive  of  the  German  working-men 
making  any  great  effort  to  maintain  as  an  option  the  right 
to  sue  under  an  employers’  liability  act,  for  the  reason  that 
the  benefit  to  a German  working  man  Avho  is  permanently 
and  totally  injured  is  two-thirds  of  liis  entire  wages  as  long 
as  he  lives;  and  for  the  further  reason  that  the  benefit  paid 
his  Avidow  is  fortj"  per  cent  of  his  Avages  as  long  as  she  re- 
mains his  AvidoAV,  and  that  the  benefit  to  his  minor  chil- 
dren during  their  minority  is  fifteen  per  cent  for  each  child, 
Avitli  a maximum  confined,  as  I remember  it,  to  two-thirds 
of  the  Avages  for  all  of  them  including  the  widoAv;  that  is, 
the  same  amount  the  man  himself  Avould  have  received  if 
he  had  been  permanently  injured.  Now,  in  point  of  fact 
that  proAudes  for  that  man's  family,  in  a manner  that  no 
lump  sum  would  be  certain  to  provide  for  them — even  the 
Avhole  |40,000  verdict  that  has  been  mentioned;  and  I be- 
lieve the  working  men  of  this  country  can  be  induced  to  see 
it  in  that  light.  And  I am  frank  to  say,  from  the  stand- 
point of  those  of  us  who  are  not  working  with  our  hands 
for  wages,  that  a provision  for  our  families  in  the  event  of 
our  respective  deaths  or  our  total  and  permanent  disabili- 
ty, that  would  take  such  a form  as  that  and  be  reasonably 
adequate,  would,  as  we  sit  here  today,  be  more  satisfactory 
to  us  than  the  possibility  of  collecting  a large  lump  sum  of 
money.  Therefore  if  this  thing  could  be  worked  out  on 
some  basis  that  would  give  reasonable  or  if  possible  en- 
tire assurance  to  the  working  people  of  this  country  that 
they  would  have  precisely  the  kind  of  benefits  that  would 
accomplish  the  purpose  that  we  desire  to  accomplish,  I be- 
lieve that  on  the  whole  there  would  not  be  any  great  num- 
ber who  would  desire  to  retain  any  remnent  of  the  old  law. 


227 


I may  be  wrong,  but  that  is  the  way  I view  it. 

From  the  practical  standpoint,  in  the  little  Rhode  Island 
experiment  that  I.  have  already  adverted  to,  where  the 
workingmen  are  not  required  to  accept  the  benefits  at  all 
but  have  a perfect  right  if  they  prefer  to  sue  the  employer, 
they  have  had  one  suit,  I believe,  in  eight  years.  They  are 
disposing  of  over  |25,000  a year  in  benefits.  And  in  point 
of  fact  they  have  only  had  about  half  a dozen  compromises 
based  on  the  idea  that  they  ought  to  pay  more  than  the  ben- 
efits provided.  The  reason  has  been  as  soon  as  a man  is 
injured  something  is  done  for  him;  these  payments  are 
commenced,  and  he  and  his  family  get  the  benefit  of  a pen- 
sion of  so  much  a week  which  is  paid  as  long  as  that  dis- 
ablement continues.  Those  object  lessons  are  having  their 
influence. 

ilfr.  Mercer:  In  investigating  this  matter,  one  of  the 

Illinois  'Commission  who  went  to  Europe  wrote  me  that  it 
was  his  opinion  that  one  of  the  chief  reasons  why  the  Brit- 
ish act  had  not  been  a success  was  that  it  was  not  compul- 
sory; that  ds,  that  they  were  given  the  option  of  accepting 
either  one  remedy  or  the  other,  as  they  saw  fit.  I would 
like  to  know  what  3"ou  think  of  that.  And,  in  the  second 
place,  the  suggestion  was  made  by  the  Chairman,  if  I un- 
derstood him,  that  the  liability  be  made  certain  and  no 
penalty  fixed  for  negligence  in  the  way  of  an  increased 
amount.  Could  jou  accomplish  the  same  result  by  making 
it  a criminal  offense  not  to  keep  up  appliances,  or  would  the 
increased  cost  of  insurance  which  the  insurance  companies 
wonld  eharge  a man  that  did  not  keep  his  business  in  good 
condition  have  that  effect? 

Mr.  Datoson:  As  to  the  British  act,  I never  have  met 

anybody  in  Great  Britain  who  aeknowledged  that  it  was 
not  successful.  They  think  it  is  successful.  The  general 


/ 


impression  tliero  is  tlmt  it  should  lie  extended,  and  tliey 
Inive  been  extendini*’  it;  and  ])roj)ose  mnv  to  extend  it  to 
compulsory  insurance  a.i^^ainst  sickness  and  to  ])rovide  for 
total  and  permanent  disability  from  any  cause;  and,  in  my 
judij,'ment,  they  will  introduce  compulsory  insurance  as 
Avell.  Personally  I also  exjiect  to  see  tliis  right  of  an  op- 
tion disappear.  I think  eventnally  it  will  be  wijied  out, 
because  the  .workmen  Avill  see  no  reason  for  keeping  it  u]). 

Mr.  GiUcttc:  T have  understood  that  there  Avas  not  tlie 

same  incentiA’e  oA’er  tliere  for  bringing  suits  at  common  Iuaa' 
that  there  is  oaw  here;  in  other  AA'ords,  that  the  excessiA^e 
A^erdict  Avas  more  rare  OA'er  there  tlian  it  is  here  (and  the 
excessiA'^e  AT^rdict  of  course  alAA’ays  stimulates  litigation). 
Furtlier,  that  these  cases  are  not  submitted  to  the  jmw 
OA^er  there  the  AA^ay  they  are  here.  Isn’t  that  right?  I sim- 
ply desire  information  as  to  the  conditions  existing  there 
and  here  and  as  to  whether  the  same  temptations  exist 
there  to  bring  an  action  at  common  Ptaa^  that  exist  here. 

Mr.  Dawson  : I think  you  are  correct  as  to  the  exces- 

siA^e  Verdict.  A A^erdict  of  |35,000  in  faA^or  of  a working- 
man or  because  of  the  death  of  a workingman,  would  prob- 
ably be  unprecedented  in  Great  Britain.  But  I am  not 
sure  that  there  are  not  verdicts  that  appear  to  them  to  be 
similarly  excessive  and  similarly  attractive. 

Mr.  GilJcfte : Do  they  haA^e  jury  trials? 

d/?’.  Dawson  : They  do  have  jury  trials,  although  the 

right  to  a trial  by  jury  is  not  so  perfect  and  complete  as  it 
is  under  our  constitutional  provisions. 

Mr.  Gillette:  And  the  ambulance-chaser  is  unknown 

there? 

Mr.  Dawson  : Well,  he  is  now.  He  was  not,  prior  to 

the  passing  of  this  law.  The  ambulance-chaser  is  not  a 
common  thing  in  Great  Britain,  because  the  legal  profes- 


r 


229 

sion  is  more  confined  there  than  it  is  here,  and  it  has  its 
own  ethics  and  enforces  them  pretty  severely.  There  was 
ambulance  chasing  in  Great  Britain,  there  is  no  doubt 
about  that,  until  there  was  an  act  regulating  the  fees  that 
these  lawyers  could  charge. 

Now,  as  to  the  second  part  of  your  question,  Mr.  Mercer, 
I think  it  is  true  tliat  the  certainty  of  a penalty  in  the  way 
of  a higher  rate  of  premium,  for  failure  to  have  safety  ap- 
pliances, etc.,  will  do,  and  always  has  done,  more  to  cause 
those  safety  appliances  to  be  installed  than  any  feeling  on 
the  part  of  the  employer  that  he  may  possibly  have  an  ac- 
cident and  that  there  may  possibly  be  a large  verdict 
against  liim.  The  only  variance  from  that  situation  is 
just  after  he  has  had  an  accident  and  has  had  a large  ver- 
dict against  him,  perhaps,  in  consequence.  Of  course  when 
that  happens  he  has  a great  many  safety  appliances  intro- 
duced very  promptly.  There  is  no  question  that  a smart 
increase  in  his  premium  over  what  he  would  have  to  pay  if 
he  had  safety  appliances  would  be  a tremendous  incentive 
to  the  employer  to  put  them  in.  And  the  most  effective 
work  in  favor  of  safety  appliances  that  is  done  in  any  coun- 
try in  the  world,  is  done  through  the  Mutual  employers’ 
liability  insurance  companies  under  the  German  law. 

MORXIXG  SESSION  JULY  30,  1909. 

Mr.  Meager:  Mr.  Chairman,  before  we  begin  our  dis- 

cussion, I have  two  resolutions  which  I would  like  to  sub- 
mit: ^‘First,  Whereas^  no  convenient  compilation  of  the 

laws  of.  other  countries  in  regard  to  workmen's  compen- 

{ sation  and  insurance  for  industrial  accidents  is  available 

1 in  English; 

2 Resolved,  that  this  conference  respectfully  request  the 
Commissioner  of  Labor  of  the  Lmited  States  to  have  the 

f full  texts  of  such  laws  translated  into  English  at  the  ear- 

^ * 

i 


230 


liest  possible  moment  and  pnblisli  tliem  in  a bulletin  of 
the  I^nrean  of  Labor. 

The  second  resolution  is  as  follows:  Whereas,  authori- 

tative information  in  regard  to  the  comparative  cost  to  the 
employer  of  employers’  liability  insurance,  as  under  the 
American  sj^stem,  and  workmen’s  compensation  and  acci- 
dent insurance,  as  under  the  British  and  German  systems, 
respectively,  is  not  available  in  the  United  States; 

Resolved,  that  this  conference  respectfully  request  the 
Commissioner  of  Labor  of  the  United  States  to  have  a 
study  of  this  subject  made  by  a competent  investigator,  and 
the  results  published  at  the  earliest  practicable  moment, 
eitlier  in  a special  report  or  in  a bulletin  of  tlie  Bureau  of 
Labor. 

il/r.  Dawson : I move  that  the  resolutions  be  united  and 

reported  on  as  one. 

Mr.  Gillette:  I am  in  favor  of  the  resolution,  but  I 

would  like  to  have  those  statistics  come  back  to  this  con- 
ference and  be  chewed  over  before  they  are  published.  I 
think  possibly  this  conference  might  give  valuable  informa- 
tion and  suggestions  to  the  department  before  the  bulletin 
ultimately  goes  to  press  for  general  distribution. 

Mr.  Mercer:  Mr.  Chairman,  if  you  submitted  the  ad- 

vance sheets  of  that  report  to  the  different  members  on  the 
committee  so  that  they  could  take  it  up  with  their  respec- 
tive states,  don’t  you  think  that  would  answer  the  purpose? 

Mr.  Gillette : Yes,  I think  that  would  answer  every  pur- 
pose. ( 

The  motion  that  the  resolutions  be  united  and  reported 
on  as  one  was  seconded  and  carried,  and  the  resolutions 
adopted  as  read. 

The  Chairman:  Gentlemen,  the  topic  for  this  session 

is  the  practicability  of  workmen’s  compensation  acts.  Mr. 


231 


Clarke  is  not  present.  The  next  name  on  the  proiiTaiii  is 
that  of  Dr.  Frankel.  We  would  be  very  glad  to  hear  Dr. 
Frankel  discuss  the  question  of  practicability. 

Dr.  Frankel:  Mr.  Chairman  and  gentlemen,  a few  days 

ago  I was  asked  to  read  the  manuscript  of  a forthcoming 
volume  on  the  subject  of  employers’  liability.  In  tliis  vol- 
ume the  author  says  that  the  United  States  may  x^^rhaps 
consider  herself  fortunate  in  tlie  fact  that  she  still  has  no 
workmen’s  compensation  act,  for  the  reason  that  she  now 
has  the  experience  of  all  other  countries  to  guide  her.  As 
a result,  if  the  states  ever  adopt  a workmen’s  compensa- 
tion scheme  it  ought  to  be  possible  to  get  the  best. 

It  seems  to  me  that  the  question  of  practicability  is 
rather  well  answered  by  tin's  statement,  including,  as  it 
does,  the  fact  that  all  countries  excepting  tlie  United 
States  have  to-day  a workmen’s  compensation  act  in  some 
form  or  other.  Many  of  these  acts  have  been  in  force  for 
a comparatively  long  period  of  years,  and  have  shown  in 
their  administration  that  they  are  feasible  and  that  they 
largely  answer  the  purpose  for  which  they  were  enacted. 
We  want  to  be  a little  careful  about  our  statements  this 
morning  and  not  indulge  in  exaggeration.  I repeat,  in  the 
main  the  laws  have  protected  workmen  against  accidents 
by  preventing  them,  and,  in  addition,  have  insured  com- 
pensation when  accidents  occurred. 

From  the  standpoint  of  practicability  the  testimony  is 
ample  that  other  countries  are  administering  laws  in  which 
the  workman  is  protected,  not  through  liability  laws  such 
as  we  have  in  the  United  States  with  a fellow-servant  doc- 
trine and  a negligence  doctrine.  Accidents  are  admitted 

to  be  chargeable  to  industry.  The  workman  who  suffers 

/ 

accident  as  a result  of  his  contact  with  that  industry  is 
proportionately  compensated. 


As  a ^^priK'ticar'  jiroposition,  I tliiiik  wo  consider 

the  subj(‘ct  imdor  two  li(‘ads:  (1)  wliat  is  beiii;]!:  done  in 
other  countries;  (2)  what  can  we  do  in  tlie  Unit(Ml  States 
based  nj)on  foreij^n  h'.iii  slat  ion  and  exjierience? 

Generally  S])eakini2:,  all  coinpeusation  laws  in  Europe 
are  based  npoii  the  i>riinary  principle  that  an  indemnity 
should  he  paid  to  an  injured  workman.  Such  is  tlie  coni- 
])ensah)ry  act  in  England  and  in  other  countries.  It  has 
been  su])plemented  in  a few  countries  by  the  s(‘Condary 
])roiH)sition  that  the  liability  which  tlie  employer  is  com- 
])elled  to  assume  must  he  iinarante(‘d  to  the  em])loyee  under 
some  form  of  insurance.  These  are  the  fimdamentals. 
Under  the  former  the  employer  is  liable  for  certain  classes 
of  accidents.  Under  the  latter,  in  addition  to  assuming 
this  liability  the  employer  must  in  advance  of  the  accident 
safeguard  the  interests  of  the  workman  by  distributing  his 
risk.  The  workman  in  addition  to  being  assured  cempen- 
sation  is  insured  agaiust  its  possible  loss.  It  is  an  insur- 
ance scheme  attached  to  the  compensation  scheme. 

The  .situation  in  England  probably  interests  you  most  of 
all,  because  it  is  most  analogous  to  that  in  the  United 
States.  We  discussed  England  somewhat  at  length  yes- 
terday, and  I do  not  feel  that  it  is  necessary  to  go  into  the 
matter  further  at  present,  other  than  to  make  a few  com- 
ments. Mr.  Dawson  stated  among  other  things,  in  answer 
(o  a question,  that  he  had  never  heard  anyone  in  England 
attack  the  compensation  act,  and  that  all  to  whom  he  spoke 
in  England  were  in  favor  of  it.  That  statement  was  per- 
fectly true;  but  he  should  have  added  that  he  did  hear, 
from  Englishmen  outside  of  England,  certain  statements 
disparaging  to  the  present  operation  of  that  law.  These 
statements  must  be  taken  for  what  they  are  worth.  They 
are  statements,  however,  that  were  made  to  us,  and  I think 


iu  many  iiiistances  they  are  significant.  We  were  told,  for 
example,  that  the  administration  of  a compensation  law  in 
England  lias  worked  hardships.  It  is  claimed  that  the  ac- 
cident insni'ance  companies  there  in  some  instances  go  to 
extremes  in  eyading  responsibility.  I was  told,  for  exam- 
ple, of  one  case  wliere  a.  girl  who  had  her  leg  taken  off  and 
who  was  entitled  to  receive  compensation  under  the  act, 
was  compelled  to  come,  weekly,  some  miles  froih  a suburb 
of  London  and  personally  make  application  for  her  week- 
13^  indemnit^o  In  other  words,  the  max'hinery  of  the  in- 
surance sclieme  liad  not  adjnst(‘d  itself  to  meet  the  condi- 
tions existing  among  the  working  classes.  I say  it  is  sig- 
nificant, furthermore,  that  at  a imHding  of  the  federated 
British  trades  nnions,  held  ni  Xottingham  last  September, 
a resolution  was  passinl,  and  I believe  nnanimonsl^',  re- 
(jiiesting  the  British  government — I believe  it  was  worded 
more  stronglv — demanding  a compulsory  accident  insur- 
ance scheme  for  British  workmen.  And  representatives 
of  English  labor  nnions  whom  we  met  at  the  International 
rongress  on  Labor  Legislation  in  Lucerne  w(*re  em])hatic 
in  their  statements  that  fhe  compensation  plan  as  at  pres- 
ent in  force  did  not  meet  the  exigencies  o-f  the  situation. 
I give  you  those  facts,  without  attempting  in  any  wa^'  to 
express  a personal  opinion. 

The  English  act,  in  our  oixinion,  was  weak,  in  that  it  had 
not  taken  into  consideration 'existing  machinerv  in  Eng- 
land ifor  its  prosecution  and  administration.  I refer  in 
particular  to  the  great  Eriendly  Societies,  which  encom- 
pass millions  of  members,  and  nearl.v  all  of  which  give 
not  onl,Y  sick  benefits  but  also  accident  benefits.  Bepre- 
sentatives  of  these  associations — of  these  great  big  benevo- 
lent orders,  told  us  in  confidence  that  the  societies  had 
reached  the  zenith  of  their  power,  and  that  between  the 


234 


Avorkiiien’s  compensation  act  and  tlie  old  age  pension  law 
which  Avas  just  about  to  come  in  force,  it  was  only  a (pies- 
tion  of  time  until  the  death  knell  of  the  Friendly  Societies 
Avould  be  sounded.  The  explanation  was  a simple  one. 
The  groupe  gave  accident  benefits.  At  the  same  time,  un- 
der the  law,  the  workman  Avas  entitled  to  a benefit  from 
his  employer.  The  result  aa^us  that  in  man}'  instances  the 
compensation  AAdiich  the  workman  AA^as  obtaining  as  a re- 
sult of  accident  was  in  excess  of  his  daily  AA^age;  conse- 
quently simulation,  malingering,  ^^soldiering’’  as  Ave  call  it 
here,  Avas  on  the  increase.  EepresentatiA^es  of  one  of  tlie 
largest  Friendly  Societies  told  us  Iioaa'  their  payments  for 
benefits  were  increasing  because  their  members  were  lying 
.down  on  them  as  a result  of  the  peculiar  condition  of  af- 
fairs. 

There  are  similar  schemes  in  many  other  European  coun- 
tries. I would  direct  the  attention  of  Commissions  study- 
ing this  subject,  particularly  to  the  SAA^edish  scheme.  Mr. 
DaAA^son  is  on  the  program*,  and  I shall  leave  the  details 
for  him  to  explain,  but  it  is  interesting  in  this  connec- 
tion. Option  is  given  to  the  employer  under  the  compensa- 
tion act  of  Swedm  to  carry  his  own  liability,  or  to  insure 
himself  against  liability  in  a private  insurance  company, 
or,  if  he  so  desires,  in  a istate  department  particularly  cre- 
ated for  that  purpose.  There  is  a very  interesting  clause 
in  the  law,  under  which  the  employer  is  not  absolved  from 
liability,  by  carrying  his  own  risk  or  by  insuring  it  through 
a private  companv.  In  particular  this  has  reference  to 
cases  ol  pe^'iuanent  invalidity,  where,  under  the  law,  a pen- 
sion is  granted  to  the  individual  afflicted,  and  it  is  required 
that  the  capital  value  of  the  annuity  shall  be  set  aside. 
Unless  this  is  done  through  the  insurance  department,  the 
liability  of  the  employer  does  not  cease.  It  is  very  signifi- 


235 


cant  that  at  first  the  insurance  companies  met  with  popular 
favor,  and  were  able  to  give  lower  rates  of  premium  than 
the  insurance  department.  At  present  the  department  is 
in  the  ascendency  and  the  insurance  companies  are  going 
backwards.  I think  we  are  putting  it  mildly  when  I make 
that  statement,  aren’t  we,  Mr.  Dawson? 

Mr.  Dawson:  I think  so. 

Dr.  Frankel : As  a matter  of  fact,  the  insurance  com- 

panies admitted  that  they  could  not  keep  up  their  exist- 
ence under  the  scheme.-  Similar  schemes  you  will  find  in 
Belgium,  France,  Italy,  and  nearly  all  other  European 
countries  with  the  exception  of  Germany  and  Austria.  In 
Germany  there  is  a distinct  compulsory  insurance  propo- 
sition, .where  the  employer  is  required  to  insure  his  em- 
ployees through  a trades’  organization.  In  Austria  he  is 
required  to  do  it  through  district  assoeiations.  The  bul- 
letin to  which  Commissioner  Neill  has  called  your  atten- 
tion, will  detail  these  schemes,  and  there  is  no  use  of  taking- 
up  your  time  with  any  description  of  them  at  the  present 
moment. 

We  were  asked  yesterday  why  we  felt  so  strongly  re- 
garding the  workmen’s  compensation  proposition  as  it  ex- 
ists in  Germany.  I do  not  hold  to  the  view  that  the  trades’ 
association  as  there  developed  is  necessarily  the  best  means 
for  carrying  out  the  accident  insurance  scheme.  _ But  the 
development  in  Germany  which  is  so  particularly  signifi- 
cant and  which  strikes  one  the  moment  one  sees  it,  has  not 
only  provided  insurance  against  accident,  but  under  the 
scheme  of  the  mutual  trades’  associations  prevention  of 
accidents  to  a' considerable  extent  has  been  accomplished. 
This  has  not  been  done  in  England  under  the  compensation 
act.  It  is  true  that  the  accident  insurance  companies  re-  • 
quire  the  introduction  of  certain  safety  devices  and  that 


230 


the  ])reiniiiins  of  tlie  accident  coiiqiauies  are  hi  jiroportion. 
Tliis  is  ecpiallv  true  under  the  coniinilsory  sclieine  in  Ger- 
many. The  individual  manufacturer  is  taxed  accordinf^ 
to  a s()-call(Ml  danger  tariff,  based  on  tlie  risks  incidental  to 
liis  ])cirticnlar  trade.  Tlie  associations  liave  the  ri<»lit  un- 
der the  law  to  comjiel  members  to  live  n])  to  certain  definite 
rules  and  re**!!  bit  ions  ])r(‘scrib(‘d  by  the  associations,  which, 
when  acce|)t(Ml  by  the  insurance  dejmrtment,  have  the  va- 
lid itv  'of  law.  Violation  of  these  rnh*s  may  jilace  the 
immibers  in  a hi<»iier  dan.i>(M*  class  with  correspondingly 
higher  jireminms.  For  re])eated  violatiim  he  may  lie  es- 
tojiped  from  continning  his  business.  That  is  the  legal 
side.  Fnt  if  is  the  (*xtra.-h\gal  sid(‘  of  the  trade  associa- 
tion that  has  beim  particularly  valuable.  What  has  ha])- 
pened  is  this:  These  (‘mi>lov(*rs,  under  the  stress  of  cir- 

cumstances, (at  the  beginning  unwillingly  and  raising 
every  objection  which  they  could  possibly  think  of  against 
the  plan,)  came  together  in  these  trades'  associations. 
Where  heretofore  they  had  held  each  other  at  dagger's 
length  owing  to  the  fierceness  of  the  competition  among 
them  when  they  came  together  they  found  that  instead  of 
being  wolves  constantly  at  each  other's  throats,  they  were 
geiitlemen,  each  engaged  in  a decent  and  respectable  occu- 
pation.  They  found  that  they  had  many  things  in  common. 
And  they  found  eventually  that  it  was  to  their  distinct  busi- 
ness interests  to  introduce  every  form  of  accident  preven- 
tion existent  or  which  might  be  devised  to  'meet  their  needs. 
The  result  is  that  today,  instead  of  resisting  in  any  way 
the  introduction  of  safety  devices  they  accept  the  principle 
gladly  and  are  out  in  the  market  offering  prizes — the 
trades’  associations  themselves — for  the  best  safety  devices 
obtainable.  If  the  statement  made  hj  Mr.  Dawson  is  cor- 
rect, to  the  effect  that  Germany  ranks  second  today  in  ex- 


ports  with  reference  to  otlier  nations,  it  is  larg'eh^  attributa- 
ble to  these  trade  associations  wliicb  liave  taken  np,  in  ad- 

% 

dition  to  the  purely  Avorkmen's  compensation  question, 
otbei"  trade  relations  and  other  matters  of  interest  to  them 
as  manufacturers.  They  liaA’^e  frequent  meetings  which 
are  aatII  attended,  at  AAdiich  all  these  questions  are  consid- 
ered. It  is  because  they  haA^e  obAuated  AAmste,  because  they 
haA^e  bronglit  cost  doAA'ii  to  a minimum,  because  they  are 
working  hand  in  liand  uniformly,  that  we  feel  there  is  no 
scheme  ot  compensation  existing  in  Europe  at  the  present 
moment  that  equals  tlie  trade  associations  in  Germany. 
In  Austria,  where  the  associations  are  on  a 'territorial 
basis,  a difference  is  noticeable.  I do  not  think  Ave  need 
go  into  this  matter  any  further  at  present.  The  details 
are  matters  for  subsequent  study. 

A AA’ord  should  he  said  of  the  XorAA'egian  scheme,  AA'hicli  is 
a monopoly.  The  state  department  there  has  absolute  con- 
trol of  the  AAmrkmen’s  compensation  insurance,  'and  the 
employer  must  insure  in  it. 

A further  Avord  should  be  said  of  SAAdtzerland — a re])ub- 
lic  A^ery  similar  to  ours  in  certain  forms  of  its  legislation, 
with  a certain  .amount  of  autonomy  giA^en  to  the  indiAudual 
cantons,  AAdth  certain  rights  only  granted  to  the  Tonfeder- 
ation.  Switzerland  aauts  practically  the  first  country  in 
Europe  to- take  up  a compensation  scheme;  in  adAmnce  of 
Germany  and  Austria  and  the  other  countries;  back  in 
1877  1 think  it  AAms.  Yet  it  has  taken. Switzerland  thirty 
years  to  get  any  further.  ^Measure  after  measure  has  been 
introduced,  but  only  in  the  last  session  of  the  Saauss  par- 
Jmment,  AAms  it  possible  in  the  lower  house  to'pass  a com- 
'^pulsory  accident  bill  which  will  come  up  for  consideration 
this  fall  in  the  upper  house.  After  mature  consideration 
the  Saauss  bill  adopted -the  monopolistic  scheme — the  Nor- 


238 


Avegian  scheme;  with  a central  state  accident  department/ 
This  means  that  the  accident  companies  in  Switzerland 
liave  been  left  out  of  consideration  altogether.  T do  not 
express  any  opinion  as  to  the  merits  of  the  bill,  I cite  it 
to  you,  and  particularly  to  tlie  members  of  the  commissions 
to  suggest  lines  along  which  they  may  study.  The  Swiss 
scheme  is  significant,  because  therc^  is  no  doubt  that  the 
SavIss  legislators,  and  tlie  governnumt  officials  liaA^e  studied 
eA^ery  other  system  most  carefully.  The}^  have  been  doing 
so  for  thirty  years.  They  are  experts.  Again,  the  Swiss 
scheme  is  novel  and  of  importance  in  that  it  Avill  use  ma- 
chinery already  in  existence  as  the  A^ehicle  through  which 
to  disburse  benefits  and  for  other  adminlstratiA^e  purposes. 
The  bill  provides  that  the  State  Department  shall  utilize 
the  so-called  sickness  clubs.  The  central  department  will 
be  the  organization  to  prepare  the  tables  of  rates  and  do 
all  the  actuarial  work;  it  will  be  the  recipient  of  all  the 
funds;  but  their  distribution  is  to  be  carried  on  through 
the  local  sickness  clubs  in  the  individual  cantons.  The 
clubs  will  arrange  that  members  get  medical  attendance, 
physician's  services,  surgical  treatment  and  appliances,  and 
so  on,  and  will  pay  benefits;  being  reimbursed  by  the  in- 
surance department.  Had  England  taken  her  Friendly 
Societies  into  consideration  in  a similar  fashion,  I believe 
she  Avculd  have  a better  plan  than  at  present  for  the  over- 
lapping and  simulation  aboA^e  referred  to  would  have  been 
largel}^  prevented. 

I asked  the  question  yesterday  whether  the  Illinois  bill 
was  not  defeated  by  reason  of  the  opposition  of  the  labor 
unions.  I think  it  can  safely  be  said  that  it  was.  They 
opposed  it  on  the  ground  that  they  Avere  being  deprived  of 
their  right  to  sue  under  the  common  law.  If  the  consent 
of  the  workingmen  in  the  United  States  is  to  be  obtained 


239 


to  any  compensation  scheme,  it  will  probably  be  wisest  to 
get  it  by  making  any  machinery  that  they  may  have,  part 
and  parcel  of  such  a .scheme.  I know  the  objections  which 
will  be  raised  to  this.  You  may  say  that  the  trades  union 
is  a trades  union  and  cannot  be  considered;  that  very  few 
trade  unions  have  taken  out  articles  of  incorporation.  I 
believe  most  of  them,  Mr.  Keill,  are  unchartered  organiza- 
tions, are  they  not?  You  will  say,  likewise,  that  this  ex- 
cludes the  man  who  does  not  belong  to  a trades  union. 
On  the  other  hand,  it  has  been  shown  in  Denmark,  where 
the  unemployment  insurance  is  carried  on  through  the 
trade’s  unions,  that  they  have  satisfactorily  included  mem- 
bers not  belonging  to  trade’s  unions. 

Xow,  we  have  in  the  United  States  not  only  trade’s 
unions,  but  fraternal  orders,  many  of  which  are  weak,  and 
are  on  the  point  of  tottering,  for  reasons  that  we  do  not 
need  to  go  into  now.  My  own  idea  is  that  many  of  them 
have  gone  aside  from  their  original  purposes;  and  have 
become  insurance  companies  instead  of  fraternal  orders. 
The  original  purpose  of  being  useful  to  their  members  in 
time  of  sickness,  and  accident  has  been  lost  sight  of.  Here 
is  machinery  which  might  be  available  for  administering  a 
compensation  law.  I can  clearly  see  the  difficulties  in  the 
way  of  such  a plan.  I mention  it  only  because  in  Switzer-, 
land  they  are  going  to  attempt  it  and,  besides  the  use  of 
similar  organizations,  was  the  basis  of  the  German  insur- 
ance scheme. 

What  can  be  done  by  the  co-operation  of  sickness  clubs 
and  similar  organizations  in  the  prevention  of  accident  is 
most  forcibly  shown  by  the  experience  of  Austria.  In  Ar- 
menia the  sickness  clubs  have  formed  a federation,  which 
looks  after  the  entire  medical  care  of  the  members  of  the 
associated  clubs.  All  that  the  clubs  do  to-day  is  to  collect 


tlio  ])r(nniiiiiis  and  iiav  tlie  Ixaiofits,  tlio  iiKHlioal  treatiiKMit 
of  tlio  inomboi'S  o()iniiii>  iiiidor  tlio  o(nitr(d  of  tli(‘  fodoi*atioii. 
This  oroaiiization  koops  a oariTul  rooord  of  all  casos  of 
. sickness  dno  to  accidont  or  to  had  factory  conditions,  and 
tahnlatos  tlioni  nndor  the  ros])(‘ctivo  oniployors.  It  is  to 
the  direct  interest  of  the  enqiloyee  to  report  his  accident  to 
the  federation,  heca.nse  he  knows  it  is  "'oinj^'  to  liel]i  him  in 
the  end.  The  result  is  that  without  any  tlionf>lit  of  factory 
inspection  (which  is  had  at  its  host,  insofar  as  the  in- 
spector can  reach  a factory  only  at  certain  stated  intervals 
and  sees  it  only  under  the  conditions  at  that  monient  ai>- 
Xiarent),  under  this  isclienie  tire  employer  is  inTtititnl  hy  the 
federation  whenever  he  has  had  more  accidents  in  his  es- 
tahlishnient  within  a definite  ]ieriod  than  are  normal  to  his 
industry.  The  moral  pressure  of  the  federation  ami  of 
])tihlic  opinion  is  hronght  to  hear  upon  the  employer  to  rem- 
edy conditions  in  his  estahlishment,  which  make  for  acci- 
dents. The  results  have  shown  distinct  improvement  in 
factory  conditions  and  in  the  introduction  of  safety  devices. 
The  employers  realize  that  there  is  an  extra  legal  supervis- 
ion of  their  industries,  and  that  each  employe  has  become  a 
self  'constituted  inspector  -and  reporter  of  the  vouditions 
which  maintain  in  his  place  of  employment. 

The  workman  contributes  towrd  kis  accident  insurance, 
in  Germany,  because  the  first  thirteen  weeks'  benefit  are 
paid  not  out  of  the  accident  fund  but  out  of  the  sickness 
fund  administered  through  the  ^^Krankenkassen"  or  sick- 
ness clubs.  This  has  been  done  for  the  reason  based  on 
statistics  that  a limited  nnmher  of  accidents  can  definitely 
he  proven  to  he  due  to  the  workmen ; a definite  nnnibm^  to 
negligence  on  the  part  of  the  employers,  and  the  gTeat  hulk 
of  them  to  he  due  to  the  industry.  The  employer  pays  the 
share  of  the  risk  due  to  the  industry,  the  share  due  to  his 


241 


negligence,  and  the  workman  tlie  share  due  to  his  negii- 
gence.  ^ 

In  Switzerland  the  plan  contemi)lates  tliat  the  workmen 
shall  he  protected  not  only  against  industrial  accidents 
but  against  non-industrial  accidents  as  well.  The  compen- 
sation to  he  given  is  the  iiigliest  of  any  country  in  Europe, 
equaling  eighty  per  cent  of  tlie  workman's  daily  wages  dur- 
ing sickness.  Tin's  can  he  done  because  of  the  workman's 
contribution.  In  addition  tlie  state  is  making  a direct  con- 
tribution to  the  premium  amounting  to  one-half  per  cent 
of  the  total  Avages. 

The  German  .method,  as  I have  said,  has  been  y^ry  re- 
markable along  the  lines  of  prevention.  It  should  be  re- 
membered that  the  German  jilan  is  a continuous  ]iroposi- 
tion.  It  includes  not  only  accident  insurance,  but  insur- 
ance against  sickness,  against  invalidity,  against  old  age — 
and  likewise  provision  in  case  of  death.  It  is  continuous 
in  the  sense  that  the  man  is  not  compensated  (as  Avas  men- 
tioned yesterday)  in  a lump  sum.  This  ought  to  be  very 
carefully  considered.  The  earning  poAver  of  the  Avorkman 
has  been  estimated  upon  the  basis  of  his  expectancy  of  life, 
and  this  in  part  is  assured  to  his  family  in  case  of  his  death 
or  incapacity  through  accident. 

It  is  interesting  to  note,  ifurthermore,  that  in  the  iieAv  bill 
Avliich  has  just  been  introduced  in  the  ‘‘Bundesrath’'  (the 
bill  Avill  be -taken  up  in  the  fall,  in  all  likelihood — and  is  a 
volume  of  some  350  or  400  pages,  summarizing  the  experi- 
ence of  Grermany,  and  the  best  thought  of  its  insurance  de- 
partment), provision  is  made  for  the  extension  of  the  so- 
called  orphan's  and  widow’s  pensions  to  cover  not  only 
deaths  from  accidents  but  from  any  cause.  It  is  the  Avish 
of  the  authorities  so  far  as  it  is  possible  to  do  so  through 
an  insurance  scheme,  to  protect  the  indiAudual  Avdrkman 


242 


and  his  faiiiily*not  only  during  his  life  as  at  ‘present,  but  to 
extend  the  law  sO'  that  when  the  workman  dies  from  acci- 
dent or  disease  his  v/idow  and  children  shall  not  become 
paupers;  that  the  widow  shall  be  able  to  maintain  herself, 
and  that  the  children  shall  be  afforded  a means  of  receiv- 
ing an  education  until  the  time  they  are  16  or  18  years  of 
age.  This  is  a valuablafact  to  consider. 

I amy  say,  for  Mr.  Gillette’s  benefit,  that  I agree  with 
him  thoroughly  (and  this  idea  runs  through  all  the  for- 
eign schemes)  that  the  emplo3^er  has  a responsibility.  He 
is  responsible  for  accidents  due  to  his  criminal  negligence 
and  for  those  due  to  the  industr.v  in  Avhich  he  is  engaged. 
I think  we  can  probably  agree  that  in  any  scheme  to  be 
adopted  in  the  United  States  the  employer  shall  be  held 
liable  for  these.  But  since  the  eompensation  is  to  be  ex- 
tended to  practically  all  employees  and  is  to  cover  the  ma- 
jority of  accidents  under  those  conditions  the  employer 
should  be  relieved  of  the  unlimited  liability  which  he  has 
under  our  negligence  law.  As  in  Europe  there  should  be 
a limited  liability  so  far  as  the  amount  of  compensation  an 
injured  workman  ma.v  receive,  but  extended  over  a larger 
number  of  individuals  and  rovering  practically  all  forms 
of  accident. 

I should  Jsay  we  would  be  doing  well  if.  we  could  agree 
upon  certain  of  the  fundamentals  of  which  I have  just 
spoken,  namely,  the  recognition  of  the.  principle  of  compen- 
sation, first  of  all;  second,  the  recognition  of  the  principle 
that  if  the  employer  assumes  additional  liability  he  should 
in  exchange  be  given  certain  privileges,  particularly  a 
limitation  of  indemnity;  third,  that  the  principle  of  com- 
pensation shall  not  be  on  the  basis  of  a lump  sum  payment, 
but,  rather,  that  it  be  apportioned  to  meet  the  actual  loss 
suffered  by  a family  in  the  death  or  disability  of  a wage 


243 


earner;  furthermore  that  compensation  be  so  adjusted  as 
to  make  provision  for  the  incapacitated  workman  and  his 
family  during  his  lifetime,  for  the  family  after  his  death 
^Yhere  the  children  are  of  working  age. 

I hope  that  the  outcome  of  this  meeting  will  be  some 
effort  toward  uniformity  in  legislation. ' You  will  notice 
that  I have  refrained  from  expressing  any  opinion  as  to 
whether  any  of  the  foreign  systems  are  adaptable  to  the 
United  States.  My  own  thought  is  that  between  the  com- 
pulsory scheme  in  Germany  and  the  purely  compensatory 
scheme  in  Englanil  Ave  shall  find  some  sort  of  a mean  that 
is  adaptable  to  and  that  can  be  practically  administered  .in 
the  United  States.  We  shall  probably  find  that  such  a 
scheme  will  be  adaptable  not  only  to  one  but  to  all  of  our 
states.  Except  so  far  as  their  geographical  situation  is 
concerned,  and  so  far  as  there  may  be  certain  industries  in 
certain  localities,  there  are  not  sufficient  differences  be- 
tween our  states  to  warrant  us  in  having  different  legisla- 
tion in  each  state.  If  this  meeting  can  do  nothing  else 
than  to  get  together  on  some  uniform  basis,  it  would  be 
doing  a great  deal.  I thoroughly  believe  that  if  we  are 
ever  to  obtain  such  legislation  here,  it  will  have  to  be  done 
by  a concurrence  of  opinion  on  the  part  of  such  commis- 
sions as  are  already  created,  so  that  each  one  shall  be  able 
to  recommend  to  their  respective  legislatures  a draft  of  a 
bill  with  the  statement  that  this  draft  has  been  accepted 
by  the  commissions  of  other  states'.  The  moral  force  of 
such  a statement  in  the  beginning  of  new  legislation  can- 
not be  over-estimated. 

In  conclusion  I want  to  say  only  one  word  more.  I had 
hoped  that  Mr.  Glenn,  director  of  the  Russell  Sage  Foun- 
dation, would  be  here  to  attend  this  meeting.  He  has  evi- 
dently been  detained.  But  he  has  authorized  me  to  say 


244 


to  yon  tliat  if  you  will  liav(‘  a coinmitUM*  apiMiiiilcMl  i-("])r(^- 
sontiii'i:  your  various  coumiissious,  t h(U*(‘ '^vill  1m*  j>lar(*d  at 
your  <lis]H)sal  tli(‘  litoraturc^  wliich  was  (•ollx‘ct(*(l  iu  the 
study  luado  foi*  the  Fouudatioii  last  yoar  by  Mr.  Dawson 
and  iuys(‘lf.  This  litoratim*  is  i-atlnu'  uui(im*.  Much  of  it 
that  is  not  obtaiiiabk*  iu  tin*  riiitcM  Stat(*s.  lii  addition, 
]\Ir.  Glenn  wishes  me  to  say  to  you  that  the  manuscript  of 
the  re])ort  whicdi  we  arc^  ])re])ariiiit  will  ])robably  be  iu  readi- 
ness at  an  early  date,  and  that  the  commissions  may  have 
the  use  of  it  in  advance  of  jiriiitiuii’. 

Mr.  (jiJJctte:  I want  to  express  my  deej)(*st  a])precia- 

tion  of  Dr.  Frankel's  work  in  this  matter  and  of  the  jieii- 
erosity  of  not  only  himself  but  -the  Saite  Foundation  in 
pbtciiyo’  this  invaluable  information  at  our  disposal. 

There  are  a few  (luestions,  Dae  Franked,  that  I would  like 
to  ask  you  if  I may  trouble  you  with  them.  They  are 
troubling  me  somewhat.  What  were  your  ojiiieortunities 
for  talking  with  the  various  classes  of  people  both  in  Eng- 
land and  in  Germany?.  Did  you  talk  with  many  English 
employers? 

Dr.  Fraiil'cl:  Xot  to  a large  extent  in  England.  We 

came  in  contact  with  nearly  every  important  actuary  in 
England  who  had  given  any  study  to  the  subject,  and  with' 
the  representatives  of  the  Friendly  Societies  who  are  di- 
rectly interested  in  this  proposition.  In  Germany,  I may 
add,  we  did  see  the  important  representatives  of  the  em- 
ployei"s.  These  so-called  mutual  trade’s  societies  have  a 
federation  whose  officers  we  interviewed.  I think  Mr. 
Dawson  will  agree  with  me  when  I tell  you  that  the  senti- 
ment from  the  top  down  on  the  part  of  the  employers. was  to 

I 

the  effect  that  this  was  a legitimate  tax  on  the  industry 
and  that  they  were  prepared  to  meet  it. 

^[r.  G iUettc:  In  Genua ny  ? 


245 


Dr.  Frankd:  In  Gerniaiiy.  Isn't  that  a safe  state' 

inent,  ^Ir.  Ilawson? 

, Mr.  Dawson  : That  is  a safe  statenient,  }'es. 

J)r.  Franixci : In  En<»lan(l  the  attitnde  was  directly  the  . 

opposite.  We  left  England  sore  at  heart — I am  si)eakiiii»: 
for  myself.  The  whole  attitnde  there  was  an  attitnde  of 
pessimism;  of  b(‘lief  that  the  thin<»-  could  not  he  controlled. 

Mr.  (Filfctte:  Did  yon  mak(‘  any  c()m])arison,  not  a de- 

tailed or  statistical  comparison,  bnt  a ‘general  comparison, 
of  th(‘  amonnt  of  malin.aerin*;'  there  was  in  (lerniany  and 
in  England  under  the  operation  of  the  two  acts? 

J>r.  FrankcJ:  I don’t  think  tlnw  are  comi)arable,  even, 

if  yon  wer(‘  to  make  one. 

Mr.  (fillcttc:  Tliere  is  mni*(^  in  England? 

‘ Dr.  Frankcl : I shonld  not  say  so,  no.  The  fjnestion  of 

malin<>erin<>-  is  one  that  must  be  a])])roached  fr(}m  various 
viewpoints.  The  rampant  mannfactnrer  (there  are  of 
conrse  still  a few,  yon  know,  who  have  not  been  converted) 
Avill  tell  yon' that  the  scheme  is  no  <»‘ood  because  tlie  em- 
ployee if  he  ,i^ets  sick  or  injured  to  the  least  extent  a])])lies 
for  assistance.  There  is  no  donbt  that  the  number  of  acci- 
dents in  (xermany  has  materially  increased. 

Wr.  GiUctic  : The  number  of  claims? 

Dr.  Frankcl:  The  nnmber- of  claims,  yes.  That  is  at- 

tributed to  the  fact,  first  of  all,  that  the  employee  iioav 
knows  his  rights,  and  he  makes  a claim.  On  the  other 
hand,  it  has  been  definitely  shown  that  the  nnmber  of  fatal 
accidents,  and  the  nnmber  of  deaths,  luiA’e  decreased  most 
materially. 

Q.  Does  that  apply  also.  Doctor,  to  dismemberment  ac- 
cidents? 

D}\  Frankcl:  To  serious  and  fatal  accidents,  yes;  acci- 

dents involving-  permanent  incapacity. 


246 


Q.  They  have  materially  diminished? 

Dr.  Franlcel:  Yes.  I>ut  if  a man  cuts  his  finger,  where 

formerly  he  would  not  Ijave  bothered  about  it  and  would 
have  kept  on  witli  his  work,  he  now  knows  he  has  a right  to 
make  a claim  and  he  does  so. 

Q.  That  is  true  in  Great  Britain  also? 

Dr.  Franlcel'.  I think  it  is  true  of  malingering  every- 
where. 

Mr.  Gillette:  Do  you  think  in  Great  Britain  there  have 

been  fewer  accidents  in  the  last  few  years? 

Dr.  Franlcel : I am  not  able  to  state  as  to-  England. 

Mr.  Parsons:  In  Germany  do  they  begin  pajdng  for 

the  disability  at  once,  or  is  there  some  little  period  for 
which  they  do  not  pay? 

Dr.  Franlcel:  The  sickness  societies  take  care  of  them 

at  the  beginning. 

Mr.  McEicen : Does  not  the  workmen’s  compensation 

act  of  England  make  provision  for  that? 

Dr.  Franlcel:  Yes.  If  he  is  disabled  for  only  a week, 

he  is  not  entitled  to  compensation.  If  he  is  injured  for 
more  than  a week,  then  he  is  entitled  to  the  first  week’s 
compensation — if  it  lasts  longer  than  two  weeks.  ‘ 

Mr.  McEioen:  Does  that  have  any  effect  on  malinger- 

ing? 

Dr.  Franlcel : It  has  an  effect  on  it,  because  he  is  not  en- 

titled to  make  a claim  unless  he  is  injured  for  more  than 
a week.  . . 

It  was  discovered  in  Germany  that  sickness  claims  in- 
creased materially.  When  a man  got  out  of  a job  he  went 
to  a sickness  club  and  wanted  relief  on  the  statement  that 
he  was  ill. 

Now,  we  have  this  not  only  from  the  viewpoint  of  the 
manufacturer  and  the  viewpoint  of  the  insurance  depart- 


ment  (wliicli  of  course  is  favorable  to  the  scheme)  but  we 
have  the  direct  testimou}^  of  the  social  group  ; b^  that  I do 
not  mean  the  Socialist  group,  but  the  social  democracy — 
who  are  largely  represented  in  the  administration  of  the 
sickness  clubs.  One  leader  in  particular  (who  said  he 
could  speak  for  600,000  workmen  in  Germany),  stated  that 
the  general  democrats  today  are  firmly  of  the  belief  that 
the  insurance  legislation  is  the  best  thing  that  could  have 
been  given  to  them.'  The  thing  they  ask  for  is  a further 
extension,  giving  them  further  rights  and  extending  insur- 
ance benefits  to  other  occupations  and  classes  of  people. 
They  claim  that  the  so-called  malingering  is  not  malinger- 
ing. Many  workmen  remain  at  work  even  while  they  are 
ill,  as  long  as  they  are  employed.  The  moment  they  are 
out -of  a job  they  go  to  a doctor  for  treatment. 

Mr.  Mercer:  Don’t  they  examine  them  when  they  come 

for’ sick  benefits? 

Dr.  Frankel:  Oh,  surely. 

Mr.  Gillette:  By  reason  of  the  contribution  of  em- 

ployees to  the  fund,  they  are  interested  themselves  in  re- 
ducing the  amount  that  is  paid  out? 

Dr.  Frankel:  To  the  sickness  fund  the  workmen  con- 

tribute two-thirds. 

Mr.  Gillette : And  they  are  therefore  interested  in,  re- 

ducing the  amount  of  malingering. 

Dr.  Frankel:  Yes.  The  new  German  bill  reduces  the 

workman’s  contribution  so  that  the  employer  in  sickness 
disability  will  have  to  pay  one-half. 

Q.  Doctor,  did  it  occur  to  you  that  the  nationalities  in 
the  two  countries  made  any  difference  in  the  two  systems, 
that  is,  that  in  Germany  possibly  the  government  was 
nearer  to  the  people  at  large  than  in  England? 

Dr.  Frankel : I think  we  should  have  to  consider  differ- 


248 


onces  in  teinporanunit  <ni(l  in  the  wliole  liistorical  develop- 
ment of  the  two  peo])le.  In  England  employers  told  ns 
that  thevTonld  make  no  aiTangement  with  their  em])loy(*s; 
that  the  em])l()ye(‘s  would  not  have  it  and  the  enii)loyers 
wonld  not  have  it. 

' (}.  Have  yon  studied  th(‘  conditions  in  Xew  Zealand? 

/>r.  FraiiJiCl:  Not  at  first  liand,  no. 

Mr.  Farsoji.s : Yon  said  tliey  could  make  no  arrange- 

ment between  tlie  employers  and  tlie  employees.  What 
did  yon  ineaii  iby  that?  • 

Dr.  : In  the  En^lisli  law  there  is  a provision 

permitt ini’’  so-calle(l  agreements — “establishment  schemes" 
I believe  they  are  called,  whereby  an  enii)loyer  instead  of 
carrying.  Ids  liability  himself  or  throngh  an  insurance  com- 
pany may  contract  with  his  employees,  if  he  has  more  tlian 
a certain  nninber,  whereby  lie  can  absolve  himself  from  lia- 
bility by  creating-  a fund  in  his  own  establishment.  Wher- 
ever this  has  been  tried  it  has  gone  to  jiiecescompletely ; it 
has  not  been  fonnd  possible  to  carry  it  on. 

Mr.  (Fillctte:  Becanse  of  the  mental  characteristics  of 

the  people? 

Di'.  Frankcl:  Y"es,  that  was  the  general  expression  of 

opinion.  ' » 

Mr.  (iillctte:  Assuming  that  constitutional  difficulties 

can  be  obviated,  Avhat  is  yoiir  conclusion  in  regard  to  the 
advisibility  of  having  a compensation  act,  at  the  incep- 
tion of  legislation  of  that  kind,  in  any  given  state,  com- 
pulsory or  optiontil? 

D)\  Fimilx'el:  Do  yon  Avant  my  personal  opinion? 

Mr.  Gillette:  Y^es,  your  conclusion  so  far  as  yon  liaA’e 

formed  one.  y 

Dr.  Fraukel : I think  the  most  significant  thing  that  we 

heard  in  Europe  Avas  in  last  October,  at  Rome,  at  the  meet- 


249 


ing  of  the  International  Congress  on  Workingmen’s  In- 
surance. At  that  time  Luzzatti,  the  former  Finance  Min- 
jster  of  Italy,  who  had  studied  the  question  for  25  years, 
and  representatives  of  the  French  Government — Paulet, 
Millerand  and  Mabillean,  arose  and  confessed  openly  in 
meeting  that  they  were  converted  to  the  doctrine  of  com- 
pulsory insurance,  after  25  years’  experience  with  it  in 
Germany,  but  they  applied  ‘^compulsion”  in  a different 
sense.  I think  we  ought  to  get  away  from  the  word  “com- 
pulsion” in  anything  that  we  attempt  in  the  United -States. 
They  don’t  say  “compulsion”  in  Europe,  they  call  it  “ob- 
ligation.” Now,  there  is  a difference  between  the  two. 
They  consider  it  the  moral  responsibility  of  the  employer  to 
see  that  his  workmen  are  safeguarded.  Luzzatti  and  the 
-others  contended  that  after  this  doctrine  of  “liberty  of  ob- 
ligation” was  accepted  in  legislation,  the  widest  latitude 
should  be  allowed  to  the  employer  as  to  his  method  of  ad- 
ministering it.  He  ought  not  to  be  tied  down  as  he  is  in 
Germany,  to  any  definite  scheme  of  insurance;  let  him 
carry  it  through  an  insurance  company,  or  carry  it  himself 
if  he  can  prove  that  he  is  able  to  do  so.  And  it  is  inter- 
esting to  know  that  Zacher,  wdio  is  the  head  of  the  labor 
statistics  bureau  in  Germany  and  who  was  formerly  in  the 
insurance  department,  (Zacher  has  written  a most  com- 
prehensive text  book  on  the  subject  and  I consider  him  an 
authority,)  in  his  report  to  the  Eome  Congress  stated  that 
the  “tendenz”  in  Europe  was  away  from  the  purely  com- 
pulsory idea  and  towards  the  acceptance  of  the  doctrine 
of  responsibility  or  obligation,  with  the  right  on  the  part 
of  the  employer,  to  carry  his  liability  in  any  way  that  he 
may  see  fit  so  long  as  he  does  it  consistently  with  protec- 
tion. 

Mr.  Gillette : That  does  not  quite  answer  the  question 


250 


I asked,  altlioiigli  I am  j[>lad  you  liave  said  wliat  you  liave. 
My  question  is  wliether  in  securing’  legislation  in  tlie  in- 
ception of  tliis  movement,  you  have  come  to  a conclusion 
as  to  wliether  it  would  be  advisable  to  impose  upon  the 
industries  of  any  state  the  absolute  obligation  to  come  un- 
der  the  terms  of  a compulsory  act,  or  whether  it  would  be 
better  to  jiermit  contracts  to  be  made  as  has  been  pro- 
posed. 

Dr.  Franl'cl:  Itemember,  you  have  got  to  differentiate 

now  between  ^^possibility”  and  ^^practicability.”  We  are 
speaking  now  of  the  purely  practical ^side.  Assuming  that 
it  would  be  a right  doctrine,  I don’t  think  we  are  ready  in 
the  United  States  to  assume  any  such  principle.  Our 
whole  method  of  administration  is  different,  and  particu- 
larly our  government  officials  are  different. 

2Ir.  GiUette:  Assuming  that  the  Wisconsin  or  Illinois 

Commission  has  to  first  report,  would  you  advise  that  they 
report  a bill  which  will  make  it  absolutely  obligatory  up- 
on all  industries  and  emx)loyers  to  compensate  their  work- 
men— 

Dr.  Fi'anl'el:  Xo,  I would  not. 

Mr.  Gillette'.  — or  would  you  make  it  j)ermissible  for 
them  to  do  so  under  certain  limits? 

Dr.  FranFel : The  main  thing  we  want  to  do  here  now 

is  to  make  haste  slowly.  I think  if  we  should  make  a mis- 
take, it  would  set  this  movement  back  25  years.  I should 
say  it  would  be  a matter  of  good  public  policy  to  limit  this 
first  of  all  to  certain  classes  of  industries'  where  the  risk 
is  great.  It  is  always  possible  to  extend  and  the  tendency 
would  be  to  extension. 

Mr.  Parsons : You  mean  ^^great”  in  the  sense  of  the  fre- 

quency of  accidents? 

Dr.  Frankel : Yes.  Take  for  instance  the  manufacture 


251 


of  gun  powder.  We  know  that  the  risk  is  much  greater 
than  it  is  in  the  making  of  clothing. 

Mr.  Parsons:  It  is  in  one  sense,  and  not  in  another. 

The  accidents  might  be  more  seriotis  hut  not  so  'frequent. 

Dr.  Franlcel:  But  can  we  not  differentiate  between 

certain  classes  of  employment?  Take  for  instance  the  man- 
ufacture of  white  lead.  We  know  that  notwithstanding 
eyer^dhing  we  can  do,  lead  poisoning  results.  And  there 
are  other  employments,  similarly,  in  which  occupational 
diseases  occur. 

Mr.  Parsons:  Wouldn’t  a workmen’s  compensation  act 

turn  the  business  on  this  side  of  the  ocean  upside  down 
considering  what  they  are  accustomed  to  pay  out  to  work- 
men now?  And  another  thing — you  spoke  of  the  risk  be- 
ing greater  because  of  the  frequency  of  accidents,  not  be- 
cause of  the  seriousness  of  them.  Just  how  did  you  mean 
to  be  understood  there? 

Dr.  Frankel : The  German  goyernment  has  so-called 

danger  tariffs,  extending  oyer  eyery  line  of  industry.  I 
don’t  know  whether  these  are  based  on  frequency,  but  they 
are  based  on  the  final  cost. 

Mr.  Parsons : I don’t  see  how  you  could  haye  a tariff 

based  simply  on  frequency  of  accidents. 

The  Chairman:  If  the  matter  is  going  to  be  taken  up 

step  by  step,  as  Dr.  Frankel  .suggests,  wouldn’t  the  natural 
thing  be  to  start  with  that  line  of  accidents  which  im- 
poses the  largest  burden  on  the  recipient  of  the  accident? 
There  is  no  yery  great  hardship  imposed  in  frequent. acci- 
dents that  lay  a man  off  for  a week  or  two  or  three  weeks ; 
he  can  take  care  of  himself  for  such  a length  of  time. 
The  burden  comes  when  a serious  accident  happens  and 
disables  a man  or  kills  him.  Wouldn’t  the  natural  way, 
Dr.  Frankel,  be  to  start  in  those  lines  in  which  the  social 


0^0 


loss  is  tlie  heaviest? 

Dr.  Fraukcl:  Fiuaiicially,  yes. 

Mr.  Parsons:  Then  you  would  run  into  this  proposi- 

tion, that  the  minute  you  would  begin  to  do  that,  if  you 
could  constitutionally,  the  workman  would  kick  against 
it  because  lie  woiiM  see  his  possible  gains  cut  down.  If 
yon  make  it  optional  with  the  manufacturer,  he  will  be 
in  favor  of  it  because  it  will  cost  him  less  to  administer 
it  than  it  does  under  the  law  as  it  stands  noAV. 

Dr.  Fnnikel:  A workmen's  compensation  scheme  of 

course  would  not  be  optional;  it  would  make  every  manu- 
facturer liable,  assuming  Ave  had  the  English  law. 

Mr.  Parsons:  If  you  tried  to  employ  that  method  in 

work  like  Mr.  Gillette's — steel  construction — ^the  work- 
men's repi*esentati.ves  Avould  all  vote  against  it,  because 
they  Avonld  get  less  money  that  way  than  they  do  now.  Our 
practical  experience  shoAvs  that. 

The  Chairman  : Do  you  mean  in  the  aggregate? 

M r.  Pa rson s : Certainly. 

Mr.  Stone:  With  this  qualification:  The  individual, 

under  the  present  scheme,  if  he  gets  a verdict  at  all  gets 
more,  but  fewer  individuals  get  anything. 

Dr.  FranJx'el : Well,  isn’t  this  a question  of  concession? 

If  the  workman  knows  that  he  is  to  be  protected  in  case  of 
practically  all  accidents  excepting  those  that  have  been 
wilfully  inflicted  by  himself  (which  are,  after  all,  very  lim- 
ited) would  he  not  make  a concession  to  the  employer  that 
the  latter  should  be  relieved  of  the  liability  which  he  has  at 
present  under  the  common  law — where  he  may  be  assessed 
in  damages  to  any  amount?  That  is  the  crux  of  the  whole 
subject.  For  that  reason  it  is  a question  of  good  public  pol- 
icy, to  get  the  concensus  of  opinion  of  the  employer  and  em- 
ployee; and  you  can  only  do  that  by  concession. 


253 


t 


Mr.  Blaine:  Wliat  is  the  practical  method  under  the 

English  act  to  protect  the  employee  against  the  insolvency 
of  the  employer? 

Dr.  Frankel : There  is  none.  In  France  there  is.  In 

France  the  government  sets  up  a special  fund  which  it 
gets  by  taxing  the  employer.  This  fund  is  used  in  case  of 
defalcation  or  in  case  of  the  employer  being  unable  to  meet 
the  liability. 

Mr.  Lyman : That  puts  the  government  behind  it. 

Dr.  Frankel:  That  puts  the  government  behind  it. 

Mr.  Blaine : That  is  collected  from  the  individual  con- 

cern? 

Dr.  Frankel:  From  the  employer.  The  employer  is 

taxed  for  that. 

Mr.  Blaine:  Would  it  be  possible  under  the  English 

act  to  have  a modification  along  the  line  of  a guaranty, 
taxing  all  the  industries  in  certain  lines  a certain  amount 
to  go  to  a contingent  fund  in  case  of  insolvency? 

Dr.  Frankel:  That  is  the  French  method.  It  is  put 

aside  in  the  shape  of  a reserve  which  is  applied  by  the  gov- 
ernment in  case  of  the  impossibility  on  the  part  of  the 
manufacturer  to  meet  his  liability. 

Mr.  Stone:  You  say  that  that  method  has  been  found 

by  the  French  people  to  be  unsatisfactory? 

) 

Dr.  Frankel:  No,  not  in  France. 

Mr.  Stone:  I thought  you  said  that  they  had  come  to 

the  conclusion  that  they  were  on  the  wrong  track? 

Dr.  Frankel:  No.  I was  speaking  of  sickness  insur- 

ance, not  accident  insurance. 

Mr.  Gillette:  What  is  the  approximate  ratio  of  the 

amount  of  what  they  term  their  sickness  fund  in  Germany? 
I believe  that  is  the  fund  out  of  which  accidents  and  disa- 
bilitius  under  thirteen  weeks  is  paid. 


254 


Dv.  F null'd  \ Yes. 

Mr.  GiUvttc'.  Wliat  is  its  ratio  to  tlie  other  fund — I 
mean  the  ai^iirej^ate  amount? 

Dr.  Fnuil'cl:  1 do  not  «et  your  idea,  Mr.  Gillette. 

'Mr.  J)(urson:  I think  I can  answer  the  question.  As 

I understand  (he  question,  it  is,  what  is  the  ditrereiice  be- 
tween the  a jiji rebate  paid  in  those  thirteen  weeks  and  the 
aggreiiate  ot  permanent  benetits  ])aid  for  that  time. 

Dr.  Franl'd:  Those  tigures  are  extant,  b\it  I have  not 

got  them. 

^h'.  Daicson  : Isn't  this  what  you  are  trying  to  get  at — 

what  the  aeeidents  cost  for  the  tirst  thirteen  weeks? 

Mr.  (FiUcttc:  Yes,  and  then  what  the  other  accidents 

cost. 

Mr.  IiKjaUs:  There  is  between  89  and  90  per  cent  loss 

upon  the  employei*s  for  injuries  over  thirteen  weeks.  The 
workman  pays  somewhere  around  11  per  cent. 

J/r.  McFicai:  That  does  not  take  into  consideration 

tJiat  the  employer  also  contributes  to  the  sickness  insur- 
ance. 

Mr.  Ihijalls:  AVell,  that  is  the  answer  to  his  question. 

Mr.  Mcrccr : I understand  you  are  not  in  favor  of  a com- 

pulsory scheme  in  the  sense  that  you  describe  it,  but  I as- 
sume that  your  judgment  would  be  that  we  would  have  to 
have  our  liability  definitely  fixed. 

Dr.  Fraiil'c] : Yes. 

J/r.  Mcrccr:  So  that  it  would  be  compulsory  in  the 

sense  of  fixing  a definite  liability. 

Dr.  Franl'cl:  Yes. 

M r.  Mcrccr : But  that  you  wouldn't  make  it  definite  as 

to  any  remedy. 

Dr.  Fraul'cl:  I believe  that  in  the  United  States  we 

should  so  far  as  possible  administer  a compensatory  scheme 


255 


tliroiigli  private  enterprise.  And  I believe  that  when  we 
can  once  fix  liabilit}^  of  the  employer  and  the  compensation 
of  the  employee  our  accident  insurance  companies  are 
thoroughly  in  position  to  take  these  matters  up  as  to  pre- 
miums and  administration  in  a manner  that  would  be  per- 
fectly satisfactory.  I don’t  think  we  should  have  to  go 
to  the  extremes  tliat  Switzerland  has. 

il/r.  fiercer:  Tlien,  as  I understand  it,  your  idea  would 

be  to  fix  the  liabilib^  definitely  by  the  law,  then  fix  the 

remedy  wliich  we  would  have  under  our  machinery,  and 

? 

then  the  matter  of  carrying  the  risk  would  be  a matter  that 
migiit  be  liandled  by  private  insurance? 

Dr.  Frankcl : l>y  private  insurance;  defining  very 

carefully,  liowever,  how  it  should  be  done.  In  nearly  every 
state  of  tlie  Union  to-day  accident  insurance  companies 
come  under  the  provisions  of  the  insurance  laws.  I don’t 
think  there  is  anytliing  that  is  so  carefully  hedged  in,  so 
carefully  safeguarded,  and  held  so  strictly  to  the  require- 
ments of  law  to-day,  as  insurance  companies.  In  their 
transactions  they  are  an  open  book.  They  are  compelled 
to  make  reports  tliat  are  not  demanded  of  any  otlier  cor- 
poration. There  is  not  a detail  of  the  business  which  is 
not  public  property;  that  is,  so  far  as  its  being  on  record 
in  the  insurance  department  is  concerned. 

Mr.  Ingalls : Assuming  we  had  power  to  put  in  a scheme 

of  compulsory  compensation,  your  idea  is  that  that  is  not 
a good  scheme? 

Dr.  Frankel : I think  that  compulsion  is  opposed  to  our 

entire  tradition.  You  must  remember  that  in  Grerman^' 
the  people  have  been  hrought  up  under  military  rule.  The 
authorities  hadn’t  the  faintest  idea,  when  they  introduced 
the  law,  what  the  result  would  be.  When  Bismarck  first 
framed  his  law,  he  did  so  for  one  reason  onh^,  and  that  was 


256 


to  overcome  wliat  lie  called  tlie  machinations  of  the  social 
democracj,  who  were  forcing  his  hand. 

Mr.  Gillette:  Now,  are  we  all  clear  on  the  questions 

that  are  being  asked  in  regard  to  this,  and  the  meaning 
Dr.  Frankel  intends  to  convey?  The  question  tliat  I meant 
to  ask  was  this  (I  don’t  knoAV  whether  I can  make  myself 
understood  or  not)  : Take  it  in  the  state  of  Minnesota,  it 

is  a question  Avhich  has  bothered  our  Commission  some 
as  to  whether  we  would  propose  a scheme  which  was  elec- 
tive— a sclieme  by  which  in  case  the  employer  and  the  em- 
ployees of  any  given  establishment  should  desire  to  come 
within  the  workings  of  a compensation  act  they  might  do 
so,  within  the  prescribed  limits  enacted  by  the  legislature, 
but  that  if  they  did  not  desire  to  do  so  that  they  need  not 
and  their  common  law  liability  should  remain;  in  other 
words,  as  to  Avhether  a tentative  movement  should  be  made 
along  those  lines — substantially  the  Illinois  proposition. 

Dr.  Frankel:  The  Illinois  act  relieved  the  employer 

from  liability. 

' Mr.  Gillette:  If  he  came  under  the  provisions  of  the 

compensation  act.  Why  not  extend  that? 

Dr.  Frankel:  Well,  it  did  provide,  I ibelieve,  that  the 

employer  might  make  a contract  with  his  employees  or 
could  insure  them  through  an  insurance  company. 

Mr.  Gillette:  But  if  he  wanted  to  stay  outside  and  still 

respond  to  his  common  law  liability,  he  could  do  so.  I 
just  simply  want  to  get  an  expression  of  opinion  as  to  what 
would  be  the  advisable  thing  .to  do.  I think  that  is  one 
point  that  is  going  to  require  the  most  careful  considera- 
tion. 

Mr.  Blaine  : The  trend  of  legislation  in  this  country  is 

to  break  down  the  defense  of  contributory  negligence, 
through  a comparative  negligence  law.  Isn’t  that  going 


257 


to  have  a tendency  to  drive  the  employees  and  the  em- 
ployers together  on  this  proposition? 

Mr.  Gillette:  It  is  a drastic  measure,  which  in  my  opin- 

ion and  my  experience  and  my  hope  will  always  meet  the 
severest  opposition  of  the  employers  and  will  never  be 
enacted.  To  bring  about  these  drastic  measures  is  simply 
to  take  away  defenses  which  the  employers  now  have.  You 
never  could  accomplish  a thing  that  way. 

Mr.  Blaine:  That  was  not  my  point.  I said  that  the 

trend  of  legislation  is  along  that  line,  as  an  actual  develop- 
ment. 

Dr.  FranJcel:  Don’t  forget  what  I said — that  Switzer- 

land has  had  this  thing  under  consideration  for  30  years, 
and  it  was  the  first  country  really  to  adopt  the  compen- 
satory principle. 

Mr.  Parsons : What  manufacturing  business  does 

Switzerland  do? 

Dr.  Frankel:  Considerable.  Watch  making,  etc. 

Mr.  Mercer:  As  I remember,  in  the  case  of  Adair 

against  the  United  States  (reported  in  the  208)  the  Su- 
preme Court  of  the  United  States  held  by  a majority  opin- 
ion— not  unanimous — that  Congress  had  no  right  to  recog- 
nize a labor  union  as  a means  of  enforcing  the  rights  be- 
tween employers  and  employees.  Now,  if  they  follow  that 
out  in  the  states  as  well  as  the  federal  government,  it  seems 
to  me  that  would  probably  prevent  the  utilization  of  these 
different  societies  which  you  have  mentioned. 

Dr.  Frankel : I offered  those  remarks  merely  as  a sug- 

gestion. I can  see  great  difficulties  in  the  way  of  doing 
anything  of  the  kind. 

The  Chairman : Well,  that  was  not  quite  the  decision, 

Mr.  Mercer.  The  law  made  it  a penal  offense  for  a rail- 
road company  to  dismiss  an  employee  because  of  member- 


258 


sliip  ill  a labor  organization.  The  Supreme  Court  held 
that  Congress  had  no  right  to  restrict  the  reason  of  dis- 
oharge. 

.1/?'.  Mcrccr:  I remember  now.  Yon  are  correct  about 

that.  They  Avent  on  to  sav  that  that  had  no  direct  rela- 
tion to  commerce. 

*l/r.  Gillette:  Doctor,  von  are  opjiosed  to  lump  sum 

compensation  in  case  of  death,  as  I understand  it? 

])r.  Franlccl : Yes. 

.1//'.  ^eoffer:  Wouldn't  von  sav  that  the  difference  in 

the  attitude  of  the  employers  in  England  and  Germany  is 
largely  due  to  these  tAyo  facts:  (1)  that  Englishmen  AA^ere 

not  accustomed  to  compulsory  systems,  but  the  Germans 

♦ 

Ayere  and  Ayere  better  jirepared  for  it  Ayhen  it  Ayas  adopted? 
(2)  That  the  English  system  is  neAy  and  the  German  sys- 
tem is  considerably  older?  Ydien  I AA^as  in  Germany 
tAyelye  years  ago,  my  impression  as  to  the  attitude  of  the 
employers  being  adyerse  to  the  compulsory  insurance 
scheme  AA'as  just  as  strong  as  your  imxiression  as  to  the  at- 
titude of  British  employers  toAAmrds  the  British  compen- 
sation act. 

Dr.  Franl'eJ:  I think-AA^e  shall  haye  to  lay  yery  great 

stress  oirtlie  difference  in  national  characteristics  and  tem- 
perament, particularly  as  betAA^een  England  and  Germany. 

Mr.  Gillette  \ Well,  I guess  AA^e  AAill  haVe  to  transfer  the 
SAA’edish  act  to  Minnesota  and  the  German  act  to  Wiscon- 
sin (Laughter). 

Dr.  Frank  el:  It  does  seem,  though,  that  betAA^een  the 

yarious  schemes  that  are  in  existence  AA^e  ought  to  get  at 
something  practical. 

Mr.  Gillette:  What  is  the  aproximate  cost  of  adminis- 

tering the  German  accident  fund? 

Dr.  Frankel : It  yaries  from  eight  to  tAA^elye  per  cent. 


259 


Wlr.  Gillette:  In  your  opinion  it  would  cost  more  under 

a scheme  either  of  private  insurance  or  otherwise,  to  ad- 
minister that  fund  in  this  country? 

Dr.  F7^ankel ; It  would  under  any  scheme^  governmen- 
tal or  otherwise. 

ilfr.  Mercer:  I would  like  to  have  Dr.  Frankel  and  Mr. 

Dawson  give  us  their  opinion  on  that  question — wliether 
it  would  cost  more  in  America,  proportionately,  to  admin- 
ister the  funds,  than  in  Germany. 

Mr.  Datrson : I should  think  it  would,  on  account  of  the 

fact  that  salaries  are  higher.  The  expense  of  administra- 
' tion  of  the  accident  insurance  fund  in  Germany  consists 
almost  wholly  of  salaries  (slightly  rents)  and  as  salaries 
are  higher  here,  I should  think  the  expense  would  he 
higher. 

J/r.  ParH<ms; : Are  not  wages  just  about  as  much  higher 

as  salaries  Avould  he  higher? 

Mr.  Dairmn:  AVe  are  not  talking  of  the  aggregate 

amount. 

JAr.  Gillette:  But  under  any  insurance  scheme  in  this 

country,  twelve  and  a half  per  cent  won't  go  very  far,  even 
towards  getting  the  business — even  before  you  get  the  home 
office  loading. 

Mr.  Dairson  : The  average  benefit  would  be  larger,  on 

account  of  the  average  wages  being  larger.  Presumably 
the  larger  salaries  might  affect  it  so  that  the  percentage 
might  be  about  the  same. 

The  Chairman : Before  this  law  in  Germany  was  en- 

acted, did  they  have  any  system  at  all  of  handling  the  ac- 
cident insurance? 

Dr.  Frankel:*  They  had  a compensation  act  for  two 
years. 

The  Chairman:  There  is  a complete  organization  for 


2G0 


the  purpose  of  administering  this  particular  act,  isn’t 
there? 

Dr.  Fraul'cl:  Yes. 

The  Cliairman  : If  you  took  care  of  it  throngh,accident 

insurance,  you  would  simply  be  adding  a new  function  to 
an  already  established  system,  and  wouldn't  this  be  possi- 
ble— that  you  would  not  need  to  increase  your  fixed 
charges,  and  the  cost  of  carrying  it  could  be  segregated? 

Dr.  Fra)fJccl : If  one  knew  the  cost  of  administering  the 

mutual  fire  associations  in  the  United  States,  one  could 
get  at  it.  That  is  what  they  are  really — ^they  are  mutual 
associations,  just  the  same  as  the  mutual  fire  insurance  as- 
sociations. 

Q.  Isn't  it  a fact  that  U Cleimany  the  numlnistratioi 
of  the  sickness  fund  has  been  carried  out  through  the  small 
local  organizations  more  successfully? 

Dr.  FranJxcI:  No.  They  took  the  local  organizations 

because  they  were  in  existence. 

Q.  I mean  with  reference  to  the  sickness  part  of  it 
alone. 

Dr.  Franl'cl : They  took  them  because,  at  the  time,  there 

were  thousands  of  small  organizations,  and  rather  than 
endanger  the  scheme  they  took  all  organizations  as  they 
were.  The  neAv  bill  contemplates  the  abolition  of  the  small 
sick  club.  Xo  new  clubs  will  be  permitted  to  come  into 
existence  with  less  than  five  hundred  members.  They  are 
practically  driving  out  of  existence  certain  forms  of  sick- 
ness societies  and  limiting  sickness  insurance  to  those 
which  have  shown  themselves  to  be  most  advantageous  for 
the  purpose. 

d/r.  Gillette:  Doctor,  omitting  sick  benefits  and  all 

those  things,  and  considering  purely  accidents,  in  your* 
opinion  ought  it  to  cost  us  more  or  less  in  Minnesota,  under 


261 


a compensation  act,  with  the  German  scale  of  compensa- 
tion, than  it  costs  now? 

.T/iC  Chairman:  I am  inclined  to  think  It  would  be  ab- 

solutely impossible  to  answer  that  question.  No  foreign 
experience  would  be  the  slightest  guide  to  us,  because  we 
don’t  know  what  our  ratio  of  expense  is.  You  can  find  out 
what  it  costs  at  the  present  time ; but  when  you  extend  that 
to  embrace  all  accidents,  you  have  no  data  to  go  on.  We 
know  our  accident  and  death  rate  is  out  of  all  proportion 
to  what  it  is  in  any  European  country.  I think  we  are 
not  in  position  at  this  time  to  give  you  that  information, 
Mr.  Gillette. 

Mr.  Dawson:  I might  say,  merely  as  a matter  of  recol- 

lection, that  the  cost  of  accident  insurance  in  Germany  is 
less  than  one* per  cent  the  cost  of  all  the  benefits  including 
invalidity  from  any  cause  whatever.  If  a workman  is  to- 
tally disabled,  he  is  taken  care  of  during  his  invalidity. 
The  sickness  insurance  covers  the  first  thirteen  weeks — 
doctors,  medicines,  hospital  services,  sanitarium  charges. 
And  the  estimated  cost  after  the  widows’  and  orphans’  in- 
surance is  added  to  it,  brings  the  total  to  between  two  and 
three  per  cent.  That  is  my  recollection.  I can  get  those 
figures  and  put  them  into  the  record. 

The  Chairman:  Mr.  McEwen,  will  you  give  us  your 

views  upon  the  practicability  of  this  kind  of  legislation? 

Mr.  McEtoen:  Mr,  Chairman,  I don’t  know  as  I have 

anything  to  say.  I came  here  with  a hobby,  and  it  has 
been  so  punched  full  of  holes  that  I am  now  so  confused 
and  bewildered  that  I really  don’t  know  what  I want  to 
talk  about. 

The  Chairman : Well,  let’s  hear  the  battered  remnants 

of  the  hobby.  (Laughter.) 

Mr.  McEtoen:  I have  received  a lot  of  information,  for 


2(12 


whicli  I am  viM*y  thankful.  And  I tliink  I voice  tlie  senti- 
ment of  tlie  oilier  members  of  onr  rommission  when  I say 
that.  1 think  this  is  almost  as  uood  for  ns  as  a trip  to 
Europe. 

In  Minnesota  we  are  in  a rather  fortunate  condition — 
more  so  1 think  than  the  (Commissions  in  the  other  states. 

There  the  three  factors  that  represent  the  element  of 
siH'iety  most  vitally  interested,  have  enteriHl  into  this  move- 
ment. Jn  the  creation  of  the  Commission  and  in  all  the 
Avork  leading  np  tojt,  there  was  a concerttnl  movement  by 
retiresentatives  of  labor,  representatives  of  employers,  and 
re}>resentatives  of  the  state  bar  assiKoation.  The  olticers 
of  the  ^linnesota  State  Feileration  of  Labor  (the  strongest 
labiH*  organization  in  that  state)  and  the  legislative  com- 
mittees of  all  of  the  railroad  brotherhoods,  joined  Avith 
the  ^linnesota  Employers'  Assixdation  and  other  organiza- 
tions of  employei's;  and  Ave  got  into  a very  happy  condi- 
tion. Subsequent  to  the  passage  of  the  laAv  creating  the 
3[iimesota  Commission,  the  State  Federation  of  Labor  met 
in  convention  and  endorsed  everything  that  had  beeu  done 
up  to  that  time.  I think  that  the  moA^emeut  is  developing, 
so  that  the  Avorkiugnien  of  ^[innesota  are  for 

almost  anything  That  would  change  the  whole  fabric  of  the 
present  system.  I think  I am  the  only  representative  of 
labor  here  to-day.  I have  sat  by  and  heard  a lot  of  things 
— that  I have  taken  pretty  good — but  I think  that  the  work- 
ingmen of  Minnesota,  and  I rather  think  the  workingmen 
of  the  country  as  a whole,  Avhen  they  come  to  know  more 
about  the  question  of  Avorkmen's  compensation,  will  grad- 
ually l>e  Aveaned  away  from  insisting  on  their  old  common 
law  rights,  if  they  are  given  in  return  something  that  is 
really  compensatory.  There  are  a lot  of  things  in  the 
old  common  law  that  the  workingmen  do  not  like,  anyway. 

1 

t 

V 


2G3 


I know  of  one  or  two  tliat  I would  like  to  have  wi^)ed  out 
by  statute  in  this  country.  But  it  seems  to  me  that  the 
difficulty  which  confronts  ns  is  more  society’s  problem  than 
one  in  which  the  laborer  or  the  employer  or  the  lawyer  is 
more  greatly  interested,  because  society  in  the  end  must  pay 
the  bill,  while  labor  suffers  the  pain.  We  have  accidents  in 
3Iinnesota.  They  are  frequent.  The  greatest  iron  mines 
in  the  country  operate  there.  xVccidents  in  them  are  fre- 
quent; they  are  serious;  and  they  are  of  such  a nature  that 
many  of  the  insurance  conqianies  were  unable  to  carry 
, them,  or  at  least  it  was  cheaper  for  the  mining  companies 
to  take  the  chance  and  carry  their  own  risk.  On  onr  rail- 
roads we  have  had  many  accidents  and  are  still  having 
' many.  We  have  not  any  reliable  data  as  to  the  number  of 
accidents  in  the  general  industries  of  the  state,  but  the  rail- 
road and  warehouse  commission  for  a period  of  five  years 
has  gathered  some  statistics  i*egarding  railroads.  The  law 
of  Minnesota  requires  that  each  and  every  railroad  operat- 
ing in  that  state  must  report  every  casualty,  every  A^Teck, 
every  accident  of  any  character — whether  human  life  or 
limb  is  involved  or  only  equipment  destroyed.  From  those 
statistics  I gather  that  oh  the  railroads  in  Minnesota  from 
1904  to  1908  (a  period  of  five- years)  there  were  404  em- 
ployees killed  and  8055  employees  injured,  or  an  average 
of  80.8  killed  each  year  in  the  operation  of  railroads  and 
IGll  injured." 

Dr.  Frankel:  Hoav  many  were  passengers,  permanent- 

ly incapacitated? 

Mr.  McEiven:  We  have  not  any  figures  on  that.  Re- 

cently the  Minnesota  legislature  passed  a law  requiring  all 
employers  to  report  industrial  accidents  to  the  Commis- 
sioner of  Labor.  The  law  has  been  in  effect  only  since  the 
first  of  June.  We  sent  out  over  30,000  blanks  to  employ- 


264 


ers  of  labor  in  Minnesota,  with  a circular  letter  asking 
them  to  report  all  accidents  that  required  loss  of  time;  and 
they  .are  coming  in  in  great  numbers,  particularly  from 
mines  and  men  engaged  in  logging  operations.  We  have 
a great  problem  there. 

Now,  we  laborers  are  usually  impatient;  Ave  are  usually 
radical.  I don’t  know  Avhy  I should  discuss  the  practical 
side  of  the  question,  because  usually  we  are  agitators  and 
don’t  get  down  to  brass  tacks.  I confess  that  freely.  But 
when  Ave  are  placed  up  against  the  gun,  responsibility 
rather  tends  to  make  ns  conserA^ative.  Now  I am  not 
afraid  of  any  paternalistic  feature  to  this  scheme.  I 
think  we  ought  to  distinguish  between  that  form  of  pater- 
nalism AAiiich  authorizes  a state  or  a municipality  to  own 
its  railroads,  to  run  its  own  street  railways,  its  own  gas 
plant,  electric  plants,  and  so  forth,  and  that  other  kind  of 
paternalism  which  cares  for  its  maimed  and  injured  in- 
habitants. We  do  not  have  any  scruples  about  taking  care 
of  society’s  mental  wrecks.  The»  state  provides  institu- 
tions for  their  care;  perhaps  largely  because  they  may  be- 
come a menace  to  society,  dangerous  to  its  citizens.  Why 
should  Ave  show  any  scruples  about  taking  care  of  the  phy- 
sical A\wecks  of  society — ^made  so  by  industry’s  terrible  haz- 
ards? After  we  progress  along  this  line  for  a few  years,  I 
don’t  think  we  will  haA^e  the  same  fear  about  the  pater- 
nalistic feature  of  this  matter  that  seems  manifest  to-day 
in  many  quarters.  I believe  that  industry  ought  to  bear 
the  burden  of  its  own  accidents. 

When  we  burn  coal  in  our  fires  at  home  (you  may  not 
need  much  heat  down  here,  but  we  do  in  Minnesota),  we 
sit  down  at  night  and  enjoy  the  warmth,  and  the  brilliance 
of  the  light,  but  every  item  of  expense  is  figured  in  the  cost 
of  producing  the  fuel:  The  expense  of  exploration;  the 


265 


sinking  of  test-pits  here  and  there;  everything,  from  the 
time  the  first  dollar  was  invested;  it  is  possible,  too,  the 
money  lost  where  explorations  did  not  pan  out  very  well ; 
the  interest  on  the  investment;  often  interest  on  money 
borrowed  for  making  explorations;  the  expense  of  labor. 
Everything  that  enters  into  it  you  and  I must  pay  for. 
Now,  in  the  mining  of  coal,  many  human  lives  are  annually 
sacrificed;  many  women  are  widowed,  many  children  are 
made  orphans.  When  we  are  paying  the  other  cost,  why 
should  not  we  wha  enjoy  the  luxury  of  a warm  coal  fire, 
also  pay  for  the  human  life  it  cost? 

An  engineer  goes  out  across  the  country  in  a fast-fiying 
train.  His  train  is  vTecked.  The  railroad  company  did 
everything  within  its  power  to  avoid  the  wreck.  They  sent 
out  section  men  ahead  and  did  everything  that  it  was  rea- 
sonably called  upon  to  do.  Yet  because  of  some  unfore- 
seen event  the  engine  is  dashed  into  the  ditch.  The  en- 
gineer is  injured;  they  take  him  in  an  ambulance  to  the 
hospital;  there  he  suffers  pain,  there  he  pays  his  own  bill, 
suffers  loss  of  time;  but  he  has  no  case  against  the  rail- 
road, because  it  was  not  negligent.  His  family  at  home  is 
worried,  is  suffering,  and  wonders  w^hat  the  future  has  in 
store  for  them.  Along  comes  a wrecking  crew  of  the  rail- 
road company.  It  lifts  the  engine  onto  the  track,  sends 
it  back  to  the  car-shops;  the  machinists  get  to  work  at  it; 
it  is  repaired,  painted  up,  and  sent  out  on  its  journey 
again — to  make  profits  for  the  railroad  company.  Now,  I 
believe  that  the  railroad  company  and  all  industry  should 
care  for  its  human  wrecks,  just  as  it  does  for  the  wreckage 
of  its  machinery,  equipment,  and  other  things.  The  thing 
to  do,  of  course,  is  to  get  dovoi  to  it  on  a scientific  basis. 
We  have  heard  a great  deal  in  this  conference  about  waste. 
If  this  great  waste  that  is  evident  in  the  matter  of  em- 


266 


ployers’  liability  and  accidents  among  working  people, 
was  one  which  tlie  employer  alone  suffered,  he  would  have 
solved  this  problem  long  ago.  If  it  was  one  in  which  the 
laborer  alone  suffered,  it  would  have  been  solved  long  ago. 
But  it  is  a thing  which  cannot  be  solved  without  taking 
into  consideration  every  factor.  If  the  employers’  liability 
companies  had  not  been  in  business,  I think  we  probably 
could  have  discovered  some  otlier  way  of  bringing  about  a 
settlement.  But  tliey  are  here,  and  we  have  simply  got  to 
meet  conditions  as  we  find  them,  and  mtike  the  best  of  them. 
I am  glad  I came  to  this  conference,  so  as  to  have  the  ad- 
vice of  such  men  as  Dr.  Frankel  and  Mr.  Dawson.  I feel 
a little  more  friendly  to  insurance  companies  to-day  than  I 
did  yesterday  or  the  day  before.  You  know,  the  laboring 
man  has  not  always  had  the  friendship  of  employers’  lia- 
bility companies,  for  reasons  well  known  to  all. 

In  discussing  the  elimination  of  waste,  we  must  not  lay 
too  much  stress  upon  the  ambulance-chasing  attorney.  1 
would  never  consent  to  his  fee  being  regulated  or  anything 
being  done  to  discourage  him  in  business,  unless  the  work- 
ingman was  given  something  stable  and  substantial  in  re- 
turn. A man  who  is  injured  has  little  money,  has  few 
friends,  and  little  knowledge  of.  the  law  and  of  the  schemes 
and  machinations  of  the  other  fellow.  The  on^y  friend  he 
has  in  time  of  injury  and  distress  is  the  ambulance-chasing 
attorney — who  is  a friend  possibly  for  a financial  consid- 
eration, but  who  is  nevertheless  the  only  person  upon  whom 
be  can  rely.  If  the  money  that  he  gets  is  the  only  kind 
of  waste  to  be  eliminated,  then,  we  cannot  expect  much. 
There  is  a lot  of  waste  in  connection  with  employers’  lia- 
bility insurance.  There  is  a lot  in  connection  with  trials 
and  courts.  Mr.  Butler,  an  attorney  for  the  Omaha 
Railway  Company,  said,  at  a conference  in  Minne- 


267 


so'ta,  that  it  cost  the  Omaha  Eailway  Company  $6,000 
for  expert  testimony  to  head  off  a $5,000  verdict.  There 
was  a lot  of  waste  in  connection  with  that.  If  this  waste 
could  he  diverted  into  one  fund,  I am  rather  inclined  to 
the  thought  that  every  man  injured  in  industry  to-day 
could  he  compensated  without  any  material  increase  in 
the  burden  upon  industry.  If  all  of  the  waste  could  he 
scientifically  diverted  into  some  one  channel,  there  would 
not  he  the  burden  upon  industry  that  there  is.  I am  in- 
cMned  to  think,  too,  that  the  state  ought  to  help  some.  It 
costs  $42,000  a year  to  try  personal  injury  cases  in  the  lit- 
tle district  from  which  I come.  It  costs  on  an  average  a 
. hundred  dollars  a day  in  the  city  of  Minneapolis  to  try 
personal  injury  cases.  If  the  state  can  be  saved  a lot  of 
this  money,  it  ought  to  he  willing  to  help  in  some  way.  We 
cannot  go  into  this  question  as  thoroughly  as  we  want  to, 
because  there  are  institutions  here  that  must  he  reckoned 
with,  and  we  must  consider  conditions  as  we  find  them,  and 
make  the  best  of  it. 

Now,  I am  here  as  a representative  of  the  workingman, 
and  I believe  others  will  come  to  this  thought,  after  a 
study  of  the  question : I am  willing  to  waive  my  common 

law  rights  to  go  into  court  and  sue  for  an  injury  done  to 
my  body  in  industry,  if  you  give  me  something  safe,  some- 
thing stabe,  something  certain,  in  return,  to  prevent  my' 
family  from  becoming  pauperized  and  the  subject  of  chai*- 
ity.  If  there  is  something  that  can  be  furnished  to  the  in- 
jured workman  that  does  not  sound  like  alms,  something 
that  gives  him  that  spirit  of  independence  that  will  permit 
him  to  raise  his  family  alongside  of  his  neighbor’s  family 
so  that  they  will  not  be  required  to  hold’ their  heads  in 
shame  because  of  a feeling  that  they  have  been  taking  alms, 
that  us  the  kind  of  thing  we  want.  ^ 


2G8 


I am  opposed  to  tlie  lump  sum  sclieme.  I was  raised 
near  a railroad  yard.  I know  of  one  case  in  particular 
where  a well-behaved  man,  a switchman,  lost  a leg.  He 
received  a verdict  of  |10,000,  and  had  about  |G,000  left 
after  fighting  the  case  through  the  courts.  He  had  been  a 
good  father  and  a good  husband.  After  he  was  injured 
and  had  this  |G,000  in  the  bank,  however,  he  didn’t  have 
anything  to  do  and  had  a lot  of  idle  time  on  his  hands.  He 
used  to  walk  leisurely  along  the  street,  on  a crutch.  The 
only  place  open  to  him  Avas  a saloon,  and  there  he  would 
sit  down  and  play  cards  for  pastime.  He  hadn’t  anything 
else  to  do.  One  day  this  man  awoke  to  the  fact  that  he 
was  broke.  His  |G,000  had  been  dissipated,  in  a very 
short  time.  His  family  then  became  a burden  upon  socie- 
ty and  was  cared  for  hj  relief  institutions.  I may  change 
my  opinion  as  I get  into  the  question  further,  but  I believe 
that  compensation  ought  to  be  extended  during  the  whole 
period  of  disability.  Mr.  Dawson  expressed  my  views  to  a 
nicety  yesterday.  I think  if  a man  is  injured  for  life,  com- 
pensation ought  to  extend  during  life,  and  to  his  family 
during  the  period  of  their  dependency.  Compensation 
ought  to  be  made  in  such  a way  that  the  man  will  receive 
something  in  the  shape  of  a weekly  wage — ^two-thirds  or 
three-quarters  or  even  one-half  of  that  which  he  earned. 

I don’t  know  really  what  scheme  we  can  work  in  Minne- 
scta.  I have  got  to  rely  largely  upon  the  judgment  of  our 
legal  friend  (Mr.  Mercer)  as  to  how  far  we  can  go.  But 
I want  to  see,  first,  a compensation  act.  I want  to  see  the 
employer  made  liable.  Since  I have  come  here  I have 
come  to  this  conclusion,  that  we  ought  not  to  bite  off  more 
than  we  can  chew.  In  Minnesota  (and  I presume  this 
would  apply  to  Wisconsin  and  NW  York  as  well)  I think 
that  we  ought  to  first  start  with  mining,  railroading,  quai*- 


269 


Tying,  steel  work,  land  a dozen  of  the  most  hazordous  em- 
.plojments,  and  give  them  a trial  and  fix  a certain  compen- 
sation for  the  -injuries  resulting  from  such  employment. 
That  is  an  actuarial  proposition  that  we  will  get  men  like 
Mr.  Dawson  to  help  us  out  with  later.  Then,  the  employ- 
ers of  labor,  being  made  liable,  can  do  business  with  the  in- 
surance companies,  and  they  will  conform  themselves  to  the 
new  idea  and  the  new  scheme.  If  we  can  get  a scheme  of 
that  kind,  I am  willing  as  a workingman — amd  I think  most 
other  workmen  would  be  willing — ^to  waive  my  common 
law  right  and  to  take  that  in  lieu  of  speculating  upon  a 
^arge  verdict.  After  such  a law  is  passed,  there  will  not  be 
the  incentive  for  juries  to  grant  such  high  verdicts.  And 
then  it  will  only  be  a year  or  two  before  we  progress  into 
something  more  extended. 

As  I said  before,  I came  to  this  conference  with  some  oth- 
er ideas,  that  I am  afraid  to  give  expression  to  uoav.  Whai. 
I have  had  to  say  has  been  extempOy  and  very  much  at  ran- 
dom. It  is  my  hope  that  before  we  get  through  we  will 
have  something  definite  to  work  on  that  will  be  as  nearly 
satisfactory  as  we  can  make  it  to  the  insurance  companies, 
to  the  employers,  and  to  the  workingmen. 

I cannot  come,  of  course,  quite  to  Mr.  Gillette’s  idea  as 
yet.  . ' . 

Some  expressions  were  made  yesterday  by  representa- 
tives of.  insurance  companies.  Now,  I think  it  safe  to  say 
that  your  risks  are  going  to  be  increased  with  the  extension 
of  the  court — made  law  which  is  gradually  going  on.  The 
insurance  companies  say  they  cannot  do  business  under 
present  rates  and  probably  will  have  to  increase  them.  So 
even  if  there  is  to  be  a little  increase  under  a compensatory 
act,  employers  of  labor  might  as  well  get  ready  for  it.  It 
will  only  be  a question  of  time  when  the  industries  of  our 


270 


state  will  make  up  for  it,  even  if  they  may  he  somewhat 
penalized  by  a compensation  act  at  first.  Wisconsin  will 
do  the  right  thing,  and  as  soon  as  Wisconsin  does  the  right 
thing  Illinois  will  come  into  line,  and  Iowa  will  do  the 
same,  and  Indiana,  and  the  efforts  of  all  the  states  will  be 
to  get  away  from  the  old  idea  of  negligence  and  adopt  that 
of  compensation  based  upon  the  risk  of  the  industry.  The 
only  thing  we  need  is  moral  courage,  to  get  rid  of  the  feai- 
that  industry  will  be  imperiled  by  a radical  course.  There 
has  been  a marked  change  in  the  last  two  or  three  years — 
thirty  years,  as  was  said  yesterday.  We  thought  only  of 
the  profits  of  our  enterprises.  Tliere  Avas  a terrific  compe- 
tition betAveen  employers  of  labor,  for  business.  A great 
evolution  has  taken  place  in  the  manner  of  production.  A 
machine  Avas  installed  and  another  had  to  take  its  place  in 
a short  time  because  of  a neAv  invention.  There  was  an  im- 
mense amount  of  money  going  to  waste,  going  into  new  ma- 
chinery, and  nobod}^  but  the  workingman  gave  any  thought 
to  the  human  side  of  our  industrial  life.  But  a sort  of 
moral  wave  has  swept  over  the  country  in  the  last  ^-ear  or 
two.  I think  all  elements  of  society  are  beginning  to  recog- 
nize that  the  human  side  of  the  question  is  worthy  of  con- 
sideration. That  is  already  being  shown,  by  this  confer- 
ence, and  in  other  lines  of  work.  The  .Bussell  Sage  Foun- 
dation is  doing  some  splendid  work,  as  are  also  other  in- 
stitutions of  that  character.  So  when  we  begin  to  give 
more  consideration  to  the  human  side  of  our  industrial 
life,  we  can  approach  this  question  a great  deal  more  intel- 
ligently than  Ave  did  a few  years  ago. 

I am  quite  certain  something  good  is  going  to  come  out 
of  this  conference.  I regret  that  I cannot  suggest  some- 
thing more  practical  than  I have.  I think  the  only  ben- 
efit that  I have  derived  so  far  is  that  it  will  help  to  con- 


271 


serve  me  rather  than  to  make  me  more  radical  than  when 
J came. 

Mr.  Ingalls : Suppose  a scheme  should  be  devised  here 

which  would  include  transportation  and  some  of  the  more 
hazardous  employments  on  a straight  compensation  basis; 
would  you  think  the  employee  would  be  inclined  to  agree 
to  waive  his  common  laAV  rights  on  entering  the  employ- 
ment? 

Mr.  McEwen:  I think  by  proper  education  and  proper 

work,  if  he  had  a certain  and  fixed  compensation,  he  would 
be  apt  to. 

Mr.  Ingalls:  Is  it  practical  to  make  such  a scheme 

stand  up? 

Mr.  ]\IcEwen:  I think  so.  I have  started  educational 

work  in  our  state.  I had  recognized  some  of  the  obstacles 
that  Ave  AA'^ould  be  confronted  with,,  but  I didn’t  know  there 
were  so  many  as  there  are.  I see  more  today  than  I ever 
did.  But  in  order  to  take  time  by  the  forelock,  I am  going 
to  appoint  25  -or  more  representatives  of  workingmen,  from 
all  over  the  state  of  Minnesota,  representing  as  many  dif- 
ferent trades,  as  a sort  of  advisory  committee  to  me  on  this 
commission.  They  are  going  to  know  everything  that  takes 
place,  and  are  going  to  be  advised  of  the  obstacles  we  meet 
from  time  to  time,  and  discuss  it.  When  the  time  comes 
for  the  presentation  of  an  act,  they  will  have  as  much  in- 
formation on  it  as  I have,  and  they  will  be  able  to  carry 
on  the  educational  work  among  their  assiciates  or  fellow 
Avorkmen,  and  help  pave  the  way  for  it.  I rather  think  the 
position  of  labor  unions  in  Illinois,  w^here  they  opposed  a 
bill  introduced  by  the  Illinois  Commission,  was  right.  Had 
I been  a citizen  of  Illinois,  I would  have  done  the  same 
thing.  There  was  no  particular  advantage  in  it  to  the 
workingman.  I would  rather  take  my  chance  on  a verdict. 


t 


272 


Mr.  Ingalls:  Would  you,  if  it  w^ere  shown  to  you  that 

not  one  in  twenty  wlio  were  injured  recovered  under  pres- 
ent- -conditions? 

Mr.  McEioen:  Well,  the  fellow  Avho  is  injured  and  has 

a chance  to  show  tliat  there  was  negligence  on  the  part  of 
the  employer,  with  the  present  attitude  of  the  courts,  liates 
to  give  up  a certainty  for  an  uncertainty. 

The  Chairman:  When  a man  is  injured,  Mr.  Ingalls, 

he  knows  or  thinks  he  knows  that  the  employer  was  negli- 
gent. Now,  if  before  tlie  injury  happens,  when  he  is  in 
good  health  and  about  to  enter  the  employment,  you  say  to 
him,  ^^vould  you  rather  take  your  chance  on  a verdict,'^  he 
might  say,  ^‘Well,  I know  a man  that  got  |30,000.”  Now, 
if  you  can  isay  to  liim,  ^Wes,  but  twenty  other  men  didn’t 
get  anything,”  and  so  forth,  he  would  be  much  more  liable 
to  agree  to  take  a certainty,  if  he  understands  the  fact  that 
a large  number  do  not  get  anything.  He  hears  of  a large 
verdict;  but  he  does  not  hear  of  the  hundreds  of  cases  where 
the  injured  party  got  nothing.  It  seems  to  me  under  those 
circumstances  the  average  workman,  if  he  is  at  all  like  the 
average  human  being  that  you  and  I know,  would  take  the 
ceitainty — as  Mr.  McEwen  said  in  his  address,  rather  than 
the  chance  of  a large  verdict. 

Mr.  Ingalls : In  Milwankee  and  Eacine  they  seem  quite 

impressed  with  the  idea  that  they  would  be  willing  to  take 
the  certainty.  Then  you  make  the  thing  certain  all  along 
the  line. 

Mr.  McEwen:  In  our  conferences  we  had  men  from  the 

railroad  service,  men  who  are  still  employed  by  railroad 
companies,  one  a locomotive  engineer,  another  a locomotive 
fireman,  three  others,  trainmen ; and  they  were  really  more 
committed  to  this  scheme  than  were  the  tradesmen  repre- 
sented. 


273 


Mr.  Gillette:  Well,  there  the  situation  is  different.  The 

fei low-servant  rule  does  not  appl}^  to  railroad  service. 

Mr.  Mercer:  Not  in  Minnesota.  Now,  it  has  been  sug- 

gested that  if  a permissible  act  were  passed  the  employer 
would  compel  the  employee  to  submit  to  that  scheme, 
and  that  that  would  leave  the  employer  in  practi- 
cally the  same  position  as  if  the  laAv  Avere  not  compulsory, 
and  would  not  leave  tlie  employee  in  as  good  a position. 
For  instance,  suppose  an  employee  goes  to  a railroad  shop 
to  get  employment.  He  goes  to  the  foreman  and  says  ^ffhe 
law  requires  you  to  put  on  a certain  safety  device;  I would 
like  to  take  the  job;  now,  if  you  will  put  that  on,  I will  take 
the  job.” 

Mr.  Gillette:  Well,  tliis  Avould  not  apply  to  railroads 

unless  purely  intra-state  lines. 

Mr.  Mercer:  It  might,  if  the  federal  government  acted 

on  it. 

Mr.  Ingalls : The  idea  I had  in  mind  was  that  he  would 

be  required  to  waiA^e  his  common  law  rights  in  order  to  have 
the  benefit  of  the  compensation,  and  if  be  did  not  Avaive 
them  he  Avould  not  get  the  benefit  of  the  compensation. 
That  would  not  impair  any  of  his  rights.  Before  the  time 
he  enters  the  employment  I mean. 

Mr.  McEiven:  I based  what  I had  to  say,  upon  what 

Mr.  Mercer  said  yesterday.  If  he  didnt  say  it,  I read  an 
opinion  that  he  prepared.  His  theory  was  that  the  state 
of  Minnesota  could  pass  a compensatory  law  that  would 
take  away  his  common  law  right  to  sue. 

Mr.  Mercer:  If  we  made  a reasonable  substitution  for 

it. 

Mr.  McEivov:  I would  be  willing  to  take  the  compen- 

sation, if  it  was  certain  and  fixed. 

Mr.  Smith : Mr.  Chairman,  I think  it  would  be  inter- 


274 


esiting  to  have  Mr.  McEwen  summarize  briefly  a few  of  the 
things  that  he  said  he  was  ^‘afraid”  to  state. 

Mr.  McEwen  : I have  given  some  thought  and  study  to 

the  question  of  state  insurance.  I am  not  committed  to 
it  in  any  way,  but  I thought  I maght  hear  more  of  it  dis- 
cussed than  I have.  That  was  the  principal  thing.  I un- 
derstand Mr.  Dawson  is  to  discuss  a certain  phase  of  that, 
this  afternoon. 

Mr.  Gillette:  Mr.  Chairman,  I think  it  is  proper  at  this 

time  and  I move  that  a eommittee  of  three  be  appointed  to 
draft  a brief  resolution  w^hich  will  as  far  as  possible  en- 
compass the  conclusions  of  this  conference,  to  be  reported 
back  at  this  afternoon’s  session,  so  as  to  see  if  we  can  ar- 
rive at  a statement  of  what  we  really  have  agreed  upon  so 
far  as  we  have  gone.  In  that  way  we  may  avoid  threshing 
over  those  matters  and  wasting  time  on  them  in  the  future. 

Mr.  Mercer:  I second  the  motion. 

Mr.  Meager:  Before  that  motion  is  put,  I should  like  to 

say  a word — ^not  exactly  in  opposition  to  it,  but  in  explana- 
tion of  the  position  of  the  New  York  Commissioners.  Our 

task  is  rather  different  from  that  of  the  other  state  Com- 



missions  represented  here.  We  were  not  appointed  to  re- 
port a workmen’s  compensation  bill,  or  any  particular  bill. 
We  were  appointed  rather  to  study  the  operation  of  the 
present  employers’  liability  law,  and,  so  far  as  our  delib- 
erations have  yet  gone,  no  one  can  say  what  our  conclu- 
sions will  be.  We  may  even  decide  that  it  will  be  advisable 
to  continue  the  employers’  liability  law  in  its  present  form, 
keyed  up  at  certain  points.  For  this  reason  I should  feel 
— ^and  Mr.  Smith  will  speak  for  himself  on  this  point — ^that 
we  could  not  agree  to  any  resolution  or  any  plan  except  as 
individuals;  and,  if  we  did  it  merely  as  individuals,  it 
would  not  have  any  particular  significance. 


275 


The  four  alternative  policies  that  seem  to  me  to  lie  be- 
fore us  in  New  York  are  (1)  to  improve  our  employers’  lia- 
bility law  by  taking  away  some  of  the  defenses  that  the 
employer  now  has;  (2)  to  introduce  a purely  optional 
workmen’s  compensation  law,  such  as  has  been  discussed 
this  morning.  This,  of  course,  would  meet  the  objection 
that  our  legal  representatives  on  the  commission  have  al- 
ready made  along  legal  lines..  I might  say,  parenthetical- 
ly, that  we  have  not  the  pleasure  of  having  a Mr.  Mercer 
on  our  commission,  and  that  so  far  as  I have  talked  with 
our  legal  members  they  are  less  optimistic  than  Mr.  Mer- 
cer as  to  the  possibility  of  drafting  a compensation  law 
that  will  be  constitutional ; not  so  much,  perhaps,  from  the 
point  of  view  of  the  federal  courts  as  from  the  standpoint 
of  our  New  York  Court  of  Appeals  which  must  apply  cer- 
tain peculiar  provisions  of  our  New  York  constitution  to 
isuch  legislatioto.  The  ssecond  plan  (the  optional  one) 
would  certainly  be  constitutional.  Another  plan  (3) 
would  be  a workmen’s  compensation  act  introduced  when 
we  can  get  neighboring  states  to  agree  on  the  same  lav'. 
I think  most  of  the  members  of  our  commission  feel  ver}' 
strongly  that  it  will  be  well  nigh  impossible  to  get  a law 
through  in  New  York  which  will  be  a satisfactory  work- 
men’s compensation  law,  if  neighboring  states  in  competi- 
tion with  our  manufacturers  do  not  adopt  similar  legisla- 
tion. The  last  policy  (4)  meets  this  objection,  (and  this 
is  a policy  that  I want  to  bring  to  your  attention  as  some- 
thing that  it  would  be  desirable  to  discuss)  by  limiting  the 
workmen’s  compensation  law  to  industries  in  New  York 
state  that  are  not  in  competition  with  industries  outside  of 
the  state.  That  proposal  has  not  been  brought  before  us 
of  this  conference.  It  happens  that  in  New  York  state  the 
most,  dangerous  industries  are  of  this  character.  Trans- 


27G 


portation  industries,  building  industries  and  two  or  three 
others,  are  strictly  local,  that  is,  not  in  competition  with 
industries  outside  of  the  state;  and  employers  in  these  in- 
dustries could  not  raise  the  objection  that  they  would  be 
put  under  a liandicap  in  competition  with  employers  in 
other  states.  The  fourth  plan,  however,  would  meet  an- 
other possible  constitutional  objection — that  it  would  be 
special  legislation. 

Now,  as  I say,  the  New  York  Commission  is  not  }^et  com- 
mitted to  a workmen’s  compensation  law.  It  may  decide 
to  favor  a modification  of  the  present  employers’  liability 
law.  And  under  these  circumstances,  as  representatives 
of  the  New  York  Commission,  Mr.  Smith  and  I could  not, 
it  seems  to  me,  officially  approve  of  any  definite  resolution. 
And  personally  I should  feel  that  it  would  be  rather  a mis- 
take at  this  time  to  formulate  even  vague  conclusions.  I 
think  the  great  value  of  this  conference  (and  I believe  that 
the  value  has  been  very  great)  is  that  we  have  come  to- 
gether and  become  acquainted,  exchanged  ideas  and  learned 
a great  deal.  Now,  my  feeling  is  that  we  had  better  go 
back  and  wrestle  with  this  problem  during  the  rest  of  the 
summer,  and  look  forward  to  coming  together  again  in  the 
fall,  when  we  shall  have  crystalized  our  views  a little  in 
our  separate  commissions  and  when  we  may  be  ready  to 
agree  upon  resolutions  of  a more  definite  character  than 
we  possible  'could  agree  upon  this  morning. 

Mr.  Gillette:  Mr.  Chairman,  I will  withdraw  the  reso- 

lutions most  gladly.  It  bas  already  served  its  purpose.  1 
did  want  to  know  wbat  the  attitude  of  the  New  York  Com- 
missioners was,  and  that  was  the  only  purpose. 

Mr.  Smith  : Well,  I guess  you  have  smoked  both  of  us 

out. 


277 


Mr.  Gillette  : I have  onh^  one  other  thing  to  say,  and 

that  is  this : I believe  that  the  reports  of  this  conference 

will  make  quite  an  interesting  contribution  to  the  litera- 
ture on  the  subject.  I know  it  will  be  valnable  to  me.  The 

V members  of  the  Minnesota  Commission  took  the  liberty  and. 

s assumed  the  responsibility  of  bringing  a reporter  here  to 

j make  a report  of  this  conference,  with  the  idea  that  it 

I ; might  be  published  if  deemed  advisable  and  distributed 

j . among  the  members  of  the  conference  and  the  various  com- 

I missioners.  This  has  been  attended  with  some  expense.  I 

I merely  mention  the  matter  at  this  time,  suggesting  that  the 

: committee  Avhich  was  appointed  yesterday  recommend  back 

•'  to  this  meeting  some  method  of — you  know  what. 

Mr.  Smith:  There  is  no  doubt  but  what  that  expense 

V will  be  divided  proportionately  among  all  the  Commission. 

? Mr.  Gillette:  I suggest  that  the  committee  report  back 

(they  are  going  to  report  on  permanent  organization  this 
{ afternoon)  and  tell  us  how  to  do  that. 

Mr.  S eager:  I move  that  we  adjourn,  to  meet  again  at 

three  o’clock  this  afternoon. 

An  adjournment  was  here  taken  until  three  o'clock  P.  M. 
July  30. 

AFTERNOON  SESSION  JULY  30,  1909. 

. The  Chairman : Gentlemen,  the  first  business.  I assume, 

" will  be  the  report  of  the  committee  appointed  on  what  we 
i might  call  the  plan  and  scope  of  the  conference.  I believe 
Mr.  Dawson  has  the  report  of  that  committee.  The  con- 
ference would  be  glad  to  receive  it. 

Mr.  Dawson : Mr.  Dawson  is  not  chairman  of  the  com- 

mittee but  is  a member  and  brings  the  report  because  it 
chances'to  be  in  his  handOTiting : 

^‘Your  committee  upon  permanent  organization  begs  to 


278 


report,  recommending  as  follows: 

1.  That  a second  conference  for  permanent  organization 
be  held  at  a later  date  as  hereinafter  provided. 

2.  That  until  such  conference  shall  have  convened  and 
organized,  the  present  cliairman  and  secretarj^  continue  in 
office. 

3.  That  tlie  cliairman  appoint  a committee  of  seven, 

of  which  he  shall  be  a member,  to  make  the  arrangements 
for  such  conference,  to  determine  the  time  and  place  where 
the  same  shall  be  held,  to  give  notice  of  the  same  and  to  re- 
port a draft  of  bj-laws  for  the  consideration  of  such  con- 
ference. . . 

4.  That  such  committee  be  instructed  to  ask  the  Gov- 
ernor of  each  state  where  no  commission  or  committee  has 
already  been  appointed,  to  designate  some  person  or  per- 
sons to  attend  and  take  part  in  such  conference,  and  also 
be  empowered  to  invite  representative  employers,  working 
men,  and  other  citizens,  to  be  present  and  to  participate  in 
the  proceedings  as  the  by-laws  may  provide. 

^ 5.  That  the  committee  be  empowered  to  arrange  for  the 

affiliation  of  the*  conference  with  the  Permanent  Commit- 
tee of  the  International  Congress  of  Workingmen’s  Insur- 
ance. 

6.  That  the  name  ^^National  Conference  upon  Compen- 
sation for  Industrial  Accidents”  be  adopted  temporarily 
and  be  recommended  to  the  next  conference  as  the  name  of 
the  permanent  organization. 

7.  That  these  conferences  should  be  solely  for  purposes 
of  conference  and  discussion,  that  no  resolution  commit- 
ting them  to  any  fixed  program,  policy  or  principle,  shall 
be  in  order  and  that  the  committee  shall  include  a provis- 
ion to  that  effect  in  the  by-laws  to  be  reported  to  the  next 
conference. 


279 


8.  That  the  committee  be  empowered  to  act  as  an  execu- 
tive committee,  to  provide  for  printing  and  circulating  the 
proceedings  of  this  conference,  to  arrange  a program  for 
the  next  conference,  to  collect  material  and  data  for  the 
state  committees  and  commissions  and  to  perform  all  other 
acts  that  may  be  necessary  or  advisable*  for  the  'purposes 
of  the  conference.” 

It  was  moved  and  seconded  that  the  report  be  adopted. 

Mr.  Gillette : I understand  that  this  will  give  that  com- 

mittee full  authority  to  transact  whatever  business  may  be 
necessary  in  making  arrangements  for  another  meeting, 
and  doing  whatever  may  be  necessary  in  the  meantime  un- 
til such  conference  is  held. 

The  Chairman : I should  assume  it  constitutes  them  an 

executive  committee,  practically,  to  arrange  for  another 
conference  at  a later  date. 

The  motion  for  the  adoption  of  the  report  was  voted  up- 
on and  carried. 

The  Chairman:  The  committee  will  be  announced  later 

on,  gentlemen. 

I believe  Mr.  Blaine  was  scheduled  to  give  us  his  views 
on  the  subject  this  morning,  but  the  time  was  too  short. 
Mr.  Blaine,  I am  sure  the  conference  would  be  glad  to  heaa^ 
from  you. 

Mr.  Blaine:  Mr.  Chairman  and  gentlemen,  I said  yes- 

terday morning  that  I came  here  particularly  for  the  pur- 
pose of  gaining  information.  I have  but  very  little  infor- 
mation that  is  of  any  great  benefit  to  you.  However,  I 
may  make  some  suggestions  that  will  furnish  food  for 
thought  and  consideration  in  the  deliberation  of  this  con- 
ference and  for  those  who  may  have  some  doubts  upon 
some  particular  phases  of  the  question  that  we  are  consid- 
ering. 


280 


I believe  that  one  of  the  greatest  obstacles  that  we  have 
to  overcome  in  tlie  consideration  of  this  question  is  the  con- 
stitutional questions  that  will  confront  us.  I have  heard 
it  said  (and  I'  am  sometimes  inclined  to  agree  with  the 
proposition  and  sometimes  inclined  to  disagree  with  it) 
that  our  federal  ^ind  our  state  constitutions  are  the  great- 
est barriers  to  real  progress,  while,  on  the  other  hand,  they 
constitute  the  greatest  bulwarks  for  our  personal  and  prop- 
erty rights  in  the  nation  and  in  the  respective  states. 

The  phases  of  tliis  question  are  so  many  that  it  is  im- 
possible to  consider  one  particular  j)hase  of  the  question 
without  considering  all  of  them.  As  I suggested  this  morn- 
ing in  making  some  remarks,  the  trend  of  legislation  is  to 
liberalize  the  laws  relating  to  employers’  liability.  And 
what  I have  to  say  in  reference  to  this  may  or  may  not  be 
my  individual  opinion  about  it,  but  it  will  possibly  lead  to 
new  phases  of  the  question. 

I think  the  trend  of  the  times  and  of  legislatures  in  the 
evolution  of  industry  is  to  liberalize  the  laws  relating  to 
employers’  liability,  making  them  more  liberal  towards  the 
einployee.  There  is  a reason  for  thi^,  based  upon  a funda- 
mental principle— the  natural  development  of  industries. 
And  while  this  is  academic,  I merely  refer  to  it  by  way 
of  explanation.  The  time  was,  when  the  machine  was  not 
in  existence;  man  performed  all  the  labor  by  hand.  The 
great  undertakings,  of  course,  were  not  accomplished  that 
we  have  accomplished  in  recent  years,  and  therefore  hand 
labor  could  do  all  the  work  that  was  necessary  in  the  in- 
dustrial world;  and  that  hand  labor  did  not  involve  the 
hazards  that  have  come  about  through  the  use  of  machines ; 
so  that  machines  have  accelerated  the  hazards  in  the  indus- 
trial world  that  man  has  had  to  suffer.  This  has  changed 
the  entire  industrial  world,  so  far  as  the  evolution  of  labor 


281 


is  concerned  and  the  problems  affecting  labor.  That  is 
one  of  the  causes  for  the  present  trend  of  legislation  and 
the  present  trend  of  thought.  It  is  not  by  reason  of  politi- 
cal conditions  at  all,  and  I don’t  suppose  it  will  ever  be 
^ made  a question  of  politics.  It  is  merely  evolution  in  the 
industrial  world.  And  the  more  our  advancement,  the 
more  improved  our  machinery  becomes  in  the  making  of 
things  and  in  the  doing  of  things,  it  seems  the  greater  the 
hazard;  because  the  idea  of  ‘^speeding  up,”  that  we  have 
to-day,  necessarily  makes  every  occupation  more  hazard- 
ous than  it  formerly  was.  The  machine  never  gets  tired; 
it  Avill  work  a man  to  his  extreme  limit,  until  he  by  nature 
becomes  more  careless,  or,  rather,  less  able  to  be  more  care- 
ful. It  is  the  machine  that  has  brought  about  this  change 
in  thought,  which  is  absolutelj^  natural.  There  is  no  place 
where  we  can  go  to  find  its  source;  it  has  come  about  quiet- 
ly, like  a thief  in  the  night.  To  meet  those  new  conditions, 
new  laws  are  being  enacted. 

I believe  Montana  and  Colorado  have  done  away  entire- 
ly with  the  common  employment  proposition.  In  Wiscon- 
sin we  have  modified  the  rule  of  law  in  reference  to  co- 
employees and  the  responsibilities  or  liabilities  of  the  em- 
ployer, on  railroads.  It  is  a natura^l  tendency,  not  brought 
about  by  reason  of  any  political  force  or  by  political  par- 
ties, nor  by  men,  but  rather  by  the  concerted  mind  of  the 
body  politic,  because  of  a recognition  of  the  extra-hazard- 
ous occupation  of  those  men  and  of  the  fact  that  the  indus- 
try should  bear  the  burden  of  loss,  no  matter  whether  the 
accidents  happen  through  the  negligence  of  the  principal 
or  of  the  employee.  The  fellow-servant  rule  has  been  great- 
ly modified  in  many  of  the  states. 

There  are  other  things  that  are  modifying  the  law  of  neg- 
ligence: For  instance,  the  question  of  appeal.  We  all 


282 


know  tliat  in  tlie  past  the  ^reat  amount  of  cases  that  were 
appealed  from  our  inferior  courts  to  our  superior  or  su- 
preme courts  were  appealed  by  the  defendant — ^^the  em- 
ployer, of  necessity;  because,  in  those  cases,  the  man  who 
sued  usually  had  no  money  and  no  friends  by  which  he 
miglit  take  an  appeal,  so  that  most  decisions  construing 
negligence  law  liave  been  brouglit  about  through  appeals 
by  the  emplo^^er  rather  than  by  tlie  employee. 

Tliat  condition  is  being  modified  in  a great  respect.  At 
the  last  session  of  the  Wisconsin  legislature  there  Avas  an 
act  passed,  not  particularly  noticed,  which  will  haA^e  a won- 
derful influence  on  the  laAA^  of  negligence.  That  law  pro- 
vides that  an  apiieal  may  be  taken  Avithout  filing  an  under- 
talking  or  giving  a bond,  upon  a showing  that  there  is  a 
constitutional  (piestion  involved — Avhether  federal  or  state, 
or  that  there  is  a question  of  law  of  such  grave  doubt  that 
the  Supreme  Coiud  ought  to  pass  upon  it;  or,  if  the  party 
is  unable  by  reason  of  his  stringent  financial  condition  to 
furnish  a bond,  then  the  court  before  Avhom  the  case  was 
tried  may  certify  it  to  the  Supreme  Court.  That  is  going 
to  giA^e  employees  in  many  cases  an  opportunity  to  appeal 
where  they  had  not  the  opportunity  io  appeal  In  the  past; 
and  naturally  it  is  going  to  increase  the  litigation  for  em- 
ployers. In  fact,  this  applies  to  all  cases,  but  I am  noAV 
speaking  of  its  effect  on  employers.  ^ 

'Another  modification  of  our  laws  is  in  reference  to  the 
question  of  what  shall  be  considered  by  the  Supreme  Court 
when  appeal  is  taken. 

The  rule  that  where  error  has  been  committed  it  is  pre- 
sumed to  have  been  prejudicial,  has  been  reversed  by  a 
statutory  enactment  in  Wisconsin  which  changes  the  rule 
entirely,  so  that  the  rule  now  is  that  unless  the  error  af- 


fects  the  merits  of  the  case  it  shall  not  be  presumed  preju- 
dicial, and  a reversal  shall  not  be  had  because  there  was  a 
mere  technical  error  iit  the  trial. 

As  I suggested  yesterday,  comparative  negligence  laws 
are  already  being  talked  about,  and  introduced  in  legisla- 
tures. All  these  things  that  have  l>een  done  and  that  are 
proposed  to  be  done  will  place  a greater  liability  or  legal 
responsibility  upon  employers  and  industries  than  has 
been  placed  upon  them  in  the  past.  All  the  changes  made 
and  which  Avill  be  made  will  more  or  less  affect  litigation 
in  negligence  cases  because  we  all  know  that  the  human 
sympathy  of  juries  and  their  desire  to  relieve  the  unfor- 
tunate is  always  on  the  side  of' the  employee  and  with  the 
modified  imle  of  law  and  procedure,  reversals  will  not  be 
easily  obtained.  This  may  all  l>e  far  awide  of  the  subject, 
but  it,  I believe,  points  to  the  possibility  of  a changed  sys- 
tem, more  equitable  toward  the  laborer  and  more  scientific 
and  definite  for  the  employer.  It  brings  ns  down  to  the 
practical  and  possible  change  for  an  absolute  compensa- 
tion for  the  laborer. 

As  I said  at  the  opening,  the  greatest  question  confront- 
ing us  is  the  constitutional  question  or  qiie.stions.  It  was 
suggested  by  one  of  those  who  is  present  today  that  he  had 
no  fear  of  our  Supreme  Court  on  this  proposition.  I en- 
tertain some  fears^  myself.  Courts  are  reluctant  to  modify 
or  change  well  established  principles.  It  usually  takes  a 
long  period  of  time  before  they  will  come  to  a decision 
changing  the  law  which  has  been  in  existence  for  a century. 
So,  while  our  courts  may  by  reason  of  the  natural  evolu- 
tion that  is  going  on  in  the  industrial  and  social  world, 
come  to  a decision  whereby  most  any  reasonable  compen- 
sation or  insurance  act  would  be  sustained,  it  is  going  to 


284 


take  a long  time;  because  it  is  a long  process  from  the  long- 
established  x>r*inciples  to  tlie  more  advanced  propositions — • 
for  courts. 

It  is  hoped  by  all  tliose  who  are  seriously  considering 
tliis  question,  that  we  Avill  be  able  to  overcome  any  coqsti- 
tutional  questions,  in  the  first  bill  that  is  enacted  into  law, 
so  that  the  movement  will  not  be  retarded  by  adverse  court 
decisions. 

There  are  various  schemes  of  industrial  insurance  or 
workmen’s  compensation  acts,  and  each  scheme  must  stand 
or  fall  after  tlie  constitutional  test  is  applied. 

In  the  state  of  Wisconsin,  and,  I suppose,  in  the  major- 
ity of  the  states  (probably  in  all  of  them — I am  not  famil- 
iar Avith  many)  the  common  laAV  applies  in  all  cases  where 
xt  ha^  not  been  clianged,  modified  or  altered  by  legislative 
enactment.  The  whole  question  of  negligence,  contribu- 
tory negligence,  assumption  of  risk,  the  doctrine  of  co- 
employees,  comparative  negligence,  and  all  those  questions 
affecting  every  phase  of  negligence  has  been  very  definite- 
ly settled  by  our  Supreme  Courts  as  provided  by  the  com- 
mon law,  or  as  modified  by  statutes. 

There  are  four  methods  or  systems,  broadly  speaking,  of 
compensating  the  workman. 

An  absolute  compensation  for  death  or  accident,  fixed  by 
law,  along  the  line  of  the  English  act;  compulsory  insur- 
ance under  the  German  scheme;  a voluntary  insurance 
plan,  and  the  common  law  liability  plan  now  in  vogue  in 
this  country. 

If  we  should  adopt  the  voluntary  insurance  plan,  mak- 
ing it  optional,  giving  the  employer  and  employee  the  alter- 
native to  accept  or  reject  the  liability  or  benefits,  under 
some  system  and  organization  of  their  own,  there  could  be 
no  question  of  such  a system  standing  the  constitutional 


285 


tests,  leaving  the  laws  on  negligence  as  they  now  are  or  as 
the  legislature  might  think  just  and  proper.  Under  such 
a system  there  could  not  be  any  constitutional  objection  to 
a state  passing  a law  providing  a certain  schedule  of  rates 
to  be  paid  by  the  employer,  classified  according  to  indus- 
tries and  the  hazards  of  the  various  industries,  creating  a 
department  in  the  state,  or  taking  an  existing  department, 
for  instances;  the  labor  department  in  conjunction  with 
the  banking/and  insurance  departments,  for  the  purpose  of 
carrying  out  the  system.  That  is,  you  could  give  the  em- 
ployer the  right  to  pay  the  amount  fixed  under  the  classi- 
fication in  Avhich  he  might  happen  to  be,  into  a general 
fund,  for  the  purpose  of  paying  losses.  The  employee  could 
accept  that,  if  he  so  desired.  The  state  then  would  have 
complete  charge  of  the  funds  and  its  disbursements,  but 
then  the  law  of  negligence  generally  would  have  to  remain 
with  all  rights  now  existing  under  the  law,  except  as  the 
same  might  be  waived  by  the  emplo.yer  and  employee. 

A compulsory  insurance  law,  making  it  obligatory  upon 
the  employer  and  the  employee  to  accept  a certain  indem- 
nity, properly  classified  according  to  the  hazard  of  the  in- 
dustry, under  the  German  system  or  State  insurance,  I 
think  v/ill  meet  with  the  greatest  constitutional  objections. 
I believe  that  such  a system  would  violate  every  constitu- 
tional test.  There  would  be  the  impairment  of  the  right 
to  contract,  confiscation  of  property,  a breach  of  the  guar- 
antee of  ‘^equal  protection  of  the  laws’’  and  ^^due  process 
of  law,”  and  the  constitutional  right  of  trial. 

An  absolute  compensation  act,  patterned  after  the  Brit- 
ish act,  would  be  more  in  harmony  with  our  institutions, 
our  mode  of  government,  and  our  entire  development,  and 
such  a system,  in  my  opinion,  will  not  meet  with  the  objec- 
tions to  which  the  other  systems  are  subject.  Every  state 


28G 


has  made  some  change  in  its  laws  on  negligence  modifying 
the  common  law,  and  there  seems  no  reason  why  we  can- 
not change  further  the  rules  of  the  common  law  and  keep 
within  the  constitutional  provisions.  I (suggest  that  an 
ahsolute  comi)ensation  can  be  fixed  by  law  for  a death  or  an 
accident  ha])pening  in  any  hay.ardous  industry,  hazardous 
industries  can  be  defined  and  classified,  arbitration  boards 
for  the  settlement  of  disputes  can  be  established,  and  if 
necessary  to  ]>reserve  the  right  of  trial,  then  permit  ap- 
peals from  the  award  of  the  board  of  arbitration  and  a 
trial,  requiring  the  party  appealing  to  waive  all  the  rights 
and  remedies  of  the  compensation  act  and  giving  the  other 
party  such  rights  or  the  present  remedies  and  defenses. 
■Such  a system  would  permit  of  a trial  but  it  is  to  be  as- 
sumed that  the  compeusation  law  would  be  so  reasonable 
to  both  parties  that  such  right  would  in  a great  majority 
of  cases  be  Avaived,  and  a trial  undesirable. 

Such  legislation  AA^ould  not  Auolate  the  constitutional 
guarantees  much  more  than  the  Wisconsin  co-employees 
act  relating  to  railroads  was  assumed  to  violate  them. 

Industries  and  occupations  could  be  properly  classified, 
at  least,  the  hazardous  industries  and  occupations,  and 
those  are  the  ones  most  desired  to  be  reached,  without  vio- 
lating the  constitution,  if  the  same  burdens,  liabilities  and 
charges  are  imposed  under  the  same  'circumstances  and  the 
same  necessities,  doing  away  entirely  with  the  question  of 
negligence  in  those  industries  and  occupations.  Under  the 
broad  police  power  of  the  states  for  the  public  safety  and 
the  common  good,  it  seems  that  a law  along  the  lines  indi- 
cated making  it  a compensation  act,  would  be  less  liable  to 
attack  on  constitutional  grounds.* 

*Kiley  v.  O.  M.  & St.  P.  By.  Co.,  119  N.  W.  309. 


/ 


287 


. When  it  comes  to  the  question  of  insurance  along  the 
lines  of  the  German  act,  the  Austrian  act,’  the  Swiss  or  the 
Norwegian  acts  (explained  this  morning  by  Dr.  Frankel) 
we  will  find  the  greatest  constitutional  objections,  in  .my 
opinion, 

I must  frankly  admit  that  I am  wholly  at  set  at  this  time 
as  to  just  how  we  are  going  to  obviate  the  difficulties  point- 
ed out. 

Tlie  practical  part  of  an  employer’s  liability  or  conipen- 
-sation  act,  or  whatever  form  it  may  take,  you  will  find 
will  meet  its  greatest  difficulty  when  tested  by  provisions 
of  our  constitutions. 

It  is  true,  however,  that  the  courts  in  considering  any 
act,  will  appreciate  the  fact  that  tliere  are  three  parties  in- 
terested in  til  is  question : the  employer,  the  employee,  and 
the  public.  I have  sufficient  faith  in  our  courts  to  be- 
lieve that  they  Avill  view  it  in  the  broader  spirit,  and  that 
will  go  far  toward  sustaining  any  act.  If  we  should  view 
any  one  side  of  it,  or  take  the  partisan  part  of  any  one  side, 
without  due  consideration  for  the  other  parties  considered, 
I think  we  would  go  very  far  away  from  the  subject,  and 
our  deliberations  would  not  result  in  accomplishing  much. 

In  conclusion,  let  me  say  by  way  of  suggestion,  that  our 
committee  is  going  to  undertake  a solution  of  the  subject, 
after  careful  study,  by  drafting  a tentative  bill,  or  bills,  ot 
members  may  present  bills,  or  there  may  be  bills  presented 
by  others,  and  then  the  employers  and  employees  ought  to 
be  and  will  be  represented  before  the  committee  as  far  as 
possible,  as  well  as  others,  so  that  the  committee  .will  get  a 
thorough  investigation  of  the  whole  subject  from  the 
standpoint  of  all  parties ; and  then  we  hope  to  take  up  the 
question  of  the  constitutionality  of  such  proposed  laws.  I 
do  not  know  as  the  committee  will  have  the  time  to  search 


288 


the  autliorities  and  consider  the  matter  to  tlie  extent  of 
satisfyinjT  themselves  upon  tlie  questions,  but  it  has  been 
suggested  that  we  probably  will  obtain  the  assistance  not 
only  of  the  attorneys  for  the  employees  and  employers,  but 
also  some  man  of  recognized  ability  who  will  take  up  the 
question  purely  from  an  independent  standpoint,  and  con- 
sider only  the  -constitutional  questions  involved.  After 
that  is  done,  I think  our  committee  will  be  in  fair  shape  to 
present  a bill  to  the  legislature  that  will  at  least  be  par- 
tially satisfactory  to  a part  if  not  all  of  those  interested. 

Mr.  Mcrccr:  I would  like  to  hear  from  ^Ir.  Ingalls. 

Mr.  Ingalls:  From  what  little  I have  investigated  this 

question,  I believe  it  ought  not  to  be  approached  at  all  ex- 
cept with  the  greatest  of  caution.  This  is  really  a move 
to  revolutionize  a system  which  has  existed  for  over  a cen- 
tury. It  proposes  really  a destruction  of  the  will  of  the 
individual,  in  a sense.  It  proposes  to  do  away  with  the 
question  of  negligence,  entirely;  which  is  a new  doctrine. 
Now,  I have  every  respect  in  the  world  for  our  constitu- 
tion. I believe  it  is  the  greatest  document  that  was  ever 
produced  by  any  people,  in  any  country,  at  any  time;  and 
I believe  it  is  elastic  and  broad  enough  to  cover  this  partic- 
ular question  without  any  change  whatever. 

I believe  that  the  only  ground  upon  which  this  matter 
can  stand  is  within  the  realm  or  domain  of  the  police  pow- 
er; the  general  welfare  of  the  people;  the  good  of  the  coun- 
try. Now,  if  it  stands  upon  that  gTound,  the  question 
must  be  affected  with  a public  interest.  If  this  is  one  of 
those  questions,  then  it  will  come  within  the  police  power 
of  the  legislature.  And  my  thought  is  that  along  the  line 
of  legislation  which  affects  railway  companies,  it  might  be 
carried  still  further,  into  the  realm  of  industrial  endeavor; 
that  that  field  is  accompanied  by  such  hazard  that  the  leg- 


289 


islature  might  take  notice  of  it  and  might  pass  a law  which 
would  compel  a direct  compensation.  No.  law  of  that  kind 
would  stand  up,  of  course,  as  everybody  knows  (I  say  ^^as 
everybody  knows” ; somebody  may  differ  with  me  on  that 
proposition)  unless  there  was  a way  of  obviating  the  ques- 
tion of  the  common  law  right  of  action  which  every  in- 
dividual has.  As  I suggested  in  a question  here,  if  you 
can  by  agreement  in  the  beginning,  eliminate  that  question 
so  that  the  employee  may  say  in  the  commencement  wheth- 
er or  not  he  will  accept  this  and  waive  his  common  law 
rights,  that  will  stand  up,  so  far  as  that  is  concerned;  I 
think  our  court  would  sustain  a law  of  that  kind,  based  on 
the  hazardous  employments  of  the  country,  under  tlie  po- 
lice power  of  the  legislatures.  Of  course  it  must  be  done 
by  the  legislatures  of  the  states.  Congress  can  have  noth- 
ing to  do  with  it.  The  only  danger  will  be  in  running 
against  the  federal  constitution.  The  police  power  is  left 
to  the  states,  entirely,  and  is  not  regulated  by  the  national 
government  at  all.  Now,  this  is  not  suggested  even  as  a 
tentative  plan,  hut  from  my  investigation  of  the  subject  it 
does  seem  to  me  that  if  there  is  anything  such  a law  could 
stand  on,  it  must  include  a.  direct  compensation,  and  you 
must  include  that  in  a preliminary  agreement,  so  that  it  is 
definite  and  certain;  then  the  employer  will  know  what 
he  has  agreed  to  pay,  and  what  the  scheme  was.  If  they 
accept,  he  knows  they  are  in ; and  if  they  do  not  accept,  he 
knows  they  are  out.  And  such  a plan  would  not  trans- 
gress any  of  the  rights  of  the  employee.  That  scheme  may 
possibly  he  sustained  by  the  court.  Of  course  there  is  not 
data  enough  in  this  country  to  really  formulate  a plan,  be- 
cause few  of  the  states  have  compiled  any  statistics  on  the 
question.  Wisconsin  has  attempted  to  do  so,  and  Minne- 
sota^and  two  or  three  others  have  attempted  it.  Of  course. 


290 


the  real  question  is,  wliat  kind  of  a law  will  stand  up  under 
tiie  constitution.  That  lies  at  the  foundation  of  everj- 
thing.  Now,  tlie  inforniation  that  we  have  gained  is  ex- 
treniely’valuahle.  l>ut  tlie  real  question  is,  what  plan  will 
the  court  sustain?  And  of  course,  all  the  states  ought  to 
enter  into  the  sanie  plan.  So  far  as  tlie  expense  is  concern- 
ed of. a,  straight  coinjiensation  plan  based  upon  right  figures 
and  right  statistics,  I doubt  very  much,  wlien  you  figure 
the  cost  of  accident  insurance  to-day,  when  you  figure  the 
cost  in  the  relations  between  tlie  employer  and  emplo^^ee 
as  affecting  disturbances  in  the  industries,  when  you  figure 
the  amount  that  the  employer  already  pa^^s  voluntarily  all 
over  this  country, — if  you  add  those  up  I doubt  whether  it 
will  exceed  the  actual  expense  of  a straight  compensatioii 
plan.  If  that  is  true,  it  is  quite  unimportant  whether  oth- 
er states  adopt  it  or  not.  But  in  Wisconsin  I think  the 
disposition  of  our  legislature  Avould  be  to  give  great  con- 
sideration to  a plan  of  that  kind ; and  I do  not  think  Wis- 
consin differs  from  very  many  other  states  on  that  ques- 
tion. The  present  plan  is  highly  unsatisfactory  to  ever}-- 
body.  It  is  unsatisfactory  to  the  employer,  because  when 
he  does  get  beaten  he  pays  three  or  four  times  what  he 
ought  to  pay.  And  it  is  unsatisfactory  from  the  stand- 
point of  the  emidoyee,  because  90  per  cent  of  the  cases  are 
lost.  I have  had  some  experience  on  both  sides  of  this 
proposition,  in  Wisconsin.  And  as  long  as  the  plan  is  un- 
satisfactory, we  of  course  pass  the  question  of  necessity 
and  come  to  the  question  of  can  Ave  do  anything,  and  if  .so 
what  can  we  do? 

Mr.  Mercer:'  Before  you  go,  Mr.  Ingalls,  I want  to  ask 
you  and  Mr.  Blaine  if  you  do  not  think,  as  a practical  prop- 
osition, that  your  committee  is  required  to  report  too  soon, 
in  view  of  the  Avork  we  all  have  ahead  of  us?  Couldn’t  you 


291 


get  a little  extension,  so  that  we  all  might  have  the  remain- 
der of  this  year  and  next  year  to  work  together  with  a'view 
to  making  a uniform  recommendation? 

Mr,  IngaUs:  I think  so.  Don’t  you,  Senator? 

Mr.  Blaine:  I think  so. 

Mr.  IngaUs:  Haste  is  not  what  we  want  at  all. 

Mr.  Mercer:  Xo.  That  would  assist  our  committee, 

and  the  next  conference,  and  all  those  things. 

Mr.  IngaUs:  Personally  I think  tliat  may  be  accom- 

plished. AYe  might  consider  that. 

Mr.  (iUlette:  Have  you  any  suggestion  to  make  as  to 

the  wise  way  to  proceed  to  satisfy  the  minds  of  this  con- 
ference an^l  these  commissioners  as  to  what  form  of  act 
would  be  constitutional? 

Mr.  IngaUs:  I think  you  have  got  to  presence  the  em- 

ployee's common  law  rights  so  tliat  he  can  say  that  he  has 
had  a cliance  to  exercise  them.  Tlien,  whether  your  com- 
pensation sclieme  will  stand  up  mider  the  police  power,  is 
a question.  The  insurance  plan  has  got  to  rest  on  the 
same  plan,  exactly.  If  it  is  obligatory,  in  order  to  be  valid 
it  must  be  within  that  power.  Of  course,  nobody  has  ever 
yet  defined  what  the  police  power  is. 

Mr.  Gillette:  Xo,  but  I mean  this:  Taking  your  com- 

mission in  Wisconsin  and  cur  commission  in  Minnesota, 
what  would  be  a practical  method  of  going  at  it  to  satisfy 
ourselves  that  we  might  agree  upon  a plan  which  we  think 
is  constitutional. 

Mr.  IngaUs:  The  only  Avay  to  do  that  would  be  to  get 

the  opinion  of  the  best  lawyers  you  have  got  in  your  re- 
spective states.  You  will  be  far  enough  away  from  it  then. 

The  Chairman  : Gentlemen,  we  have  about  fifteen  min- 

utes left. 

Wr.  Mercer:  Vie  haven't  heard  from  Mr.  Smith  as  yet. 


292 

Tlic  Chairman:  Mr.  Sinitli,  I am  sure  the  conference 

would  be  to  liear  anytliirif]^  tliat  you  care  to  say  to  us. 

Mr.  Fimith:  I don’t  know  tliat  I liave  inucli  more  to  say 

now  than  at  tin's  morning’s  session.  Like  most  of  the  mem- 
bers of  our  commission,  I have  had  no  time  to  read  np  or 
get  posled.  I did  not  until  the  other  day  know  that  I was 
down  to  sjieak  with  these  Dreadnoughts  that  have  'been 
looking  up  this  question  so  assiduously.  Dut  I thought  I 
would  quietly  sneak  down  here,  in  view  of  tlie  fact  that 
there  would  be  such  a notable  representation  from  all  over 
the  Union,  and  see  if  I couldn’t  imbibe  something  that 
would  be  of  benefit  for  our  future  consideration. 

If  I were  to  speak  entirely  from  employer’s  viewpoint  ic 
regard  to  the  question  involved,  I should  pretty  nearly  re- 
peat what  ]\Ir.  Gillette  said  yesterday  on  the  subject,  be- 
cause we  do  not  want  to  jump  too  fast  at  conclusions  if  we 
are  to  arrive  at  a plan  which  will  be  agreeable  to  all  sides. 
I think  everybody  must  admit  that  anything  which  may 
cause  the  public  to  think  there  is  anything  like  an  unAvar- 
ranted  subversion  of  existing  conditions  in  the  business 
world  threatened  would  create  .a  A^ast  amount  of  trouble 
in  this  country.  It  is  well  to  deeply  consider  how  serious 
AA'ould  be  the  results  as  to  disturbance  of  business  condi- 
tions if  anything  should  be  recommended  for  incorporation 
in  the  proposed  legislation  that  could  be  regarded  as  se- 
verely drastic  or  revolutionary. 

The  Chairman:  Mr.  Dawson,  you  were  on  the  program 

this  morning,  and  we  cut  you  off  by  adjourning. 

Mr.  Dawson : I really  do  not  want  to  give  voice  to  any 

personal  opinions  as  to  what  particular  method  would  be 
most  practical  at  the  present  time.  I have  those  opinions. 
I think  it  is  perhaps  impossible  for  any  of  us,  however  ju- 
dicial-minded we  try  to  be,  not  to  form  more  or  less  fixed 


293 


conclusions;  and  I have  the  weaknesses  of  all  ordinary 
men  in  that  respect.  But,  in  any  work  that  I am  trying  to 
do  for  you,  I don’t  feel  that  my  personal  opinion  should 
weigh  at  all.  The  thing  frames  itself  in  my  mind,  as  a re- 
sult of  the  investigations  which  Dr.  Frankel  and  myself 
were  able  to  make  last  3- ear  and  as  a result  of  studies  I have 
made  of  this  subject  extending  over  about  fifteen  or  sixteen 
years,  so  far  as  practicability  is  concerned,  in  the  two  fol- 
lowing forms:  (1)  what  lias  proved  to  be  practicable  else- 
wliere?  (2)  what  peculiar  national,  state  or  racial  reasons 
are  there  why  what  has  proved  to  be  practicable  elsewhere 
might  not  be  practicable  here? 

As  to  the  first  question,  I would  like  to  give  you  a very 
rapid  but  I think  reasonably  accurate  .view  of  what  has 
been  accomplished  abroad.  In  the  first  place,  the  princi- 
ple that  workingmen  should  be  compensated  for  industrial 
accidents  because  the  employer  was  at  fault,  has  now  been 
abandoned  virtually  in  every  country  except  ours.  If  that 
is  all  that  should  be  done  by  us,  we  would  leave  open  the 
question  of  the  amount  of  compensation.  No  country  has 
done  that.  I hope  I make  myself  understood.  At  pres- 
ent we  have  a law  which  leaves  open  both  the  question  as  to 
whether  the  employer  is  liable  and  if  so  for  how  much  he  is 
liable.  Both  of  those  questions  have  to  be  tried,  if  you  go 
to  court.  In  no  countr^^  have  they  closed  one  of  those  ques- 
tions without  closing  the  other;  that  is,  no  country  has 
changed  to  the  workmen’s  compensation  proposition  or 
what  they  call  the  occupation  risk  proposition,  without 
also  at  the  same  time  determining  in  some  manner  a meth- 
od of  fixing  the  amount  of  the  liability. 

In  England  they  have  not  gone  beyond  that.  In  Aus- 
tralia they  have  not  gone  beyond  that,  nor  in  New  Zealand. 
In  fact,  throughout  the  British  possessions  with  the  excep- 


294 


toioii  of  C'anada,  tlie  i*ul(‘  lias  Ihhmi  a(l(>i)te(l  tliat  tlie 
of  an  oni])loyoe  to  recover  (or  of  liis  family  in  ca«e  of  liis 
deatli)  sliall  be  absolute,  without  re<?ard  to  negligence,  and 
that  he  shall  recover  against  his  employer  who  is  directly 
liable  to  him;  and  that  the  amonnt  of  his  recovery  shall  be 
confined,  in  the  event  of  disabling  injury,  to  fifty  ]>er  cent 
of  bis  wages,  and,  in  the  event  of  death,  to  three  times  his 
annual  wages. 

Q.  That  is  true  of  Ilritish  Columbia,  is  it  not? 

Mr.  DaioHon  : That  is  ])ractically  time  thronghout  Great 

Ilritain;  and  in  llritish  Ooliimbia  (one  province  in  Can- 
ada) it  is  much  the  same,  but  not  quite.  Now,  that  is  all 
they  have  done  in  Great  Britain.  I said  yesterday  that 
there  was  no  feeling  in  Great  Britain  that  we  could  dis- 
cover (we  were  not  there  over  three  weeks,  but  we  Avere 
spending  all  oiir  time  on  this  subject)  that  Avhat  has  been 
done  should  be  undone.  There  is  a feeling  that  what  has 
been  done  is  not  perfect,  is  not  what  it  ought  to  be,  and  that 
there  should  be  extensions.  That  last  feeling  has  express- 
ed itself  already  in  extending  it  to  household  servants, 
clerks  in  offices  under  a certain  salary,  clerks  in  stores,  the 
goAmrnmental  marine,  government  employees,  and  so  forth, 
and  agriciiltiiral  laborers  as  well.  The  last  amendment 
also  extended  it  to  occnpational  diseases  of  a certain  char- 
acter. The  labor  union  congresses  consider  that  it  should 
likewise  be  extended  to  make  the  insurance  compulsory, 
and  that  the  insurance  should  be  with  the  state.  They 
urge  two  reasons  for  this:  one  being  that  a good  many 
employers  do  not  insure,  and  some  of  those  employers  who 
do  not  insure  become  insolyent  and  therefore  the  claims 
are  not  paid.  The  second  is,  that  by  insuring  in  primte 
companies  the  workmen  are  compelled  to  make  settlements 
with  professional  adjusters  who  drive  pretty  hard  bar- 


k 


f 


295 

gains  with  them.  I do  not  personally  wish  to  pass  at  all 
upon  the  merits  of  either  of  those  two  objections.  Twu 
other  objections  were  made  by  the  fraternal  societies;  the 
first  being  that  as  a result  of  the  passing  of  this  law  they 
were  finding  it  harder  to  get  niembers,  for  the  reason  that  a 
great  manj^  workingmen  argue  that  they  will  never  be  sick, 
but  tliat  if  disabled  it  would  be  because  of  accident;  and 
tliey  think  it  will  be  still  harder,  now  that  occu])ational 
disease  are  covered.  Their  second  objection  was  fliat  the}' 
were  having  a lieavier  sickness  rate,  wliicli  they  ascribed  to 
the  fact  that  most  of  their  niembers  are  wage  earners  and 
that  Avhen  they  had  insurance  with  them  and  were  also 
covered  under  tlie  compensation  act,  their  total  compensa- 
tion might  be  equal  to  or  even-  hi^ier  than  tlieir  daily 
wages.  These  objections,  you  will  observe,  grow  out  of  a 
want  of  system  under  the  British  laws.  They  were  i>ass- 
ed  with  very  little  regard  to  existing  institutions.  They 
were,  while  in  form  not  revolutionary,  actuall}^  more  revo- 
lutionary than  they  might  liave  been,  had  something  in 
form  looked  a good  deal  more  radical  but  which  really 
fitted  better  into  their  existing  institutions,  been  adopted. 

In  Great  Britain  they  have  no  state  insurance  against 
employers’  liability.  The  employer  may  insure,  if  he 
choose,  in  a stock  company,  in  a mutual  company,  or  in 
an  establishment  fund  to  Avhich  his  employees  contribute 
as  well  as  liimself,  provided  the  establishment  fund  is  sol- 
vent and  its  rates  adequate,  its  benefits  are  larger  than 
those  of  the  compensation  act,  and  the  contribution  of  the 
employer  is,  in  the  opinion  of  the  registrar  of  Friendly  So- 
cieties, at  least  equal  to  the  average  amount  that  he  Avould 
contribute  if  he  were  paying  under  the  act.  British  em- 
ployers, as  a class,  as  far  as  we  could  learn,  Avere  well 
pleased  with  this  insurance  and  the  way  in  which  it  was 


conducted,  and  liad  few  coinplaints  to  make.  They  are  not 
asking  for  a cliange  in  tlie  insurance  system.  The  govern- 
ment of  Great  Britain,  liowever,  is  asking  for  tlie  addi- 
tion of  a contributory  sickness  insurance,  which  they  in- 
tend to  carry  out  tlirougii  the  existing  Friendly  Societies, 
the  trades’  unions,  and  the  establisliment  funds,  and,  where 
a man  is  not  a member  of  any  one  of  those  three,  through  a 
local  society  tliat  will  be  created  by  the  government.  A 
bill  is  now  being  prepared,  which,  as  nearly  as  could  be 
learned,  will  have  those  features.  After  it  has  been  pre- 
pared, it  is  altogether  likely  that  the  burden  of  taking  care 
of  the  men  during  the  earlier  weeks,  will  be  thrown  on 
those  sickness  societies,  and  that  the  employers  will  be  ask- 
ed to  contribute  to  the  Friendly  Society  funds.  This  is  in 
imitation  of  the  German  system. 

In  Holland  and  in  Sweden,  in  Belgium,  and  in  France  as 
well,  though  it  is  quiescent  in  both  the  last-named  coun- 
tries, a provision  has  always  been  made  for  state  insurance 
in  competition  with  private,  the  idea  being  that  the  private 
insurance  companies  will  not  insure  all  employers,  and 
that  there  must  be  an  opportunity  given  to  every  employer 
to  be  insured.  The  state  department  of  Holland,  and.  the 
state  department  of  Sweden,  have  no  option  as  to  accept- 
ing every  employer  who  applies  for  insurance.  In  both  of 
those  countries  the  state  department  has  a large  share  of 
the  business;  in  both,  the  state  department  pays  commis- 
sions and  employs  agents.  In  Holland,  the  state  depart- 
ment started  out  by  attempting  to  charge  lower  premi- 
ums than  the  stock  companies,  which  resulted  in  their  get- 
ting all  the  risks  which  the  stock  companies  would  not 
take;  and,  not  knowing  their  |business  half  as  well  as  the 
stock  companies  did,  they  found  it  necessary  to  increase 
their  rates.  After  making  their  first  increase,  the  stock 


297 


companies  were  soon  able  to  decrease  theirs,  and  the  re- 
sult has  been  that  the  state  department  on  the  whole  has 
suffered.  It  has  some  advantages.  The  law  requires  a 
stock  compan}^  to  make  deposits  with  the  state  department, 
to  cover  the  capitalized  value  of  the  annuities  which  it  has 
to  pa}\  In  Sweden  the  state  department  secured  as  its 
manager  tlie  manager  of  the  most  important  Swedish  com- 
pany. He  set  out  in  exactly  the  opposite  direction.  He 
charged  higher  rates,  materially  higher,  than  the  stock 
companies,  at  the  outset.  After  a little  experience  he  be- 
gan to  reduce  the  rates,  and  they,  competing  among  them- 
selves, found  it  necessary  to  increase  the  rates  they  at  first 
fixed,  and,  in  consequence  of  that  and  of  other  conditions 
in  Sweden  t<ke  state  departmerul;  has  'been  getting  the  ad- 
vantage. Its  chief  advantage,  however,  consists  ip  the 
fact  tliat  the  government  pays  all  its  expenses,  so  that 
really  tire  stock  companies  are  against  a form  of  competi- 
.tion  that  is  extremely  severe,  and  it  is  the  opinion  of  all  the 
managers  of  stock  companies  theref  and  of  the  mutual  com- 
panies as  well,  that  they  cannot  survive  and  will  have  to 
go  out  of  existence. 

In  Belgium  also  a provision  was  made  for  state  insur- 
ance in  competition  with  private  companies.  The  provis- 
ion was  made  that  the  government  department  of  life  in- 
surance, of  life  annuities,  and  of  postal  savings  banks, 
which  are  three  branches  of  one  department,  should  also 
have  a right  to  insure  employers.  The  manager  of  that 
department  has  never  caused  that  branch  of  the  business 
, to  be  developed,  both  because  private  companies  have  cov- 
ered the  field  very  well  and  also  because  it  is  his  opinion 
that  if  he  were  compelled  to  settle  claims  with  the  working 
people  of  Belgium  it  would  be  greatly  to  the  disadvantage 
of  the  other  departments,  which  are  dealing  with  those 


298 


same  people  and  soliciting  their  jiatronage. 

In  France  they  have  a provision  for  state  insurance  in 
coiupetition  with  private  companies,  but  it  also  has  not 
been  developed.  The  reason  there  is  different.  In  France 
the  state  department  refuses  to  cover  the  temporary  disa- 
bilities or  to  pay  anything  during  the  earlier  weeks,  and 
the  employers  find  that  if  they  have  all  that  trouble  and 
expense  they  are  just  as  well  off  to  carry  the  whole  risk. 
In  case  a man  is  injured,  they  can  then  go  to  the  govern- 
ment and  buy  an  annuity  for  him  and  get  rid  of  tlie  lia- 
b’lity  in  that  manner;  that  is,  of  course,  in  case  they  do 
not  insure  in  private  companies. 

In  all  of  the  countries  tliat  I have  mentioned,  it  has  been 
necessary,  of  course,  to  collect  premiums  lar^e  enough  to 
set  up  what  is  known  as  the  capitalized  value  of  the  bene- 
fits, as  a reserve.  This  is  true  of  all  voluntary  systems,  and 
is  true  of  all  systems  that  are  voluntarily  in  the  matter  of 
choice  of  company  even  though  they  would  not  be  volum 
tary  otherwise,  though-not  to  the  same  degree.  The  mu- 
tual companies  in  those  countries  have  usually  either  fail- 
ed utterly  to  accumulate  reserves  for  the  maintenance  of 
these  annuity  payments,  or  have  failed  measurably.  None 
of  the  mutual  companies  carry  adequate  reserves.  In 
Great  Britain,  because  they  would  be  required  to  do  so  by 
public  sentiment  and  by  the  publicity  requirements  of  law, 
mutual  companies  are  almost  unknown.  In  the  other  coun- 
tries they  are  common.  Now,  I want  to  illustrate  that,  for 
I think  it  is  important  for  you  to  consider  it.  As  these 
claims  are  not  paid  in  one  sum,  as  soon  as  the  man  is  in- 
jured, but  are  distributed  in  weekly  or  monthly  payments 
as  long  as  he  lives,  for  instance  (and,  in  most  of  these 
countries,  payments  are  made  to  the  widow  and  orphans 
in  like  manner)  it  follows  that  if  you  had  a mutual  com- 


299 


pany  aod  only  collected  monej^  enough  this  year  to  pay  this 
year’s  claims,  yon  would  have  a .ver}^  low  cost  this  year. 
Next  year  you  might  have  twice  as  much  to  pay;  and  it 
would  graduall  increase.  The  mutual  companies  in  all 
those  countries,  controlled  and  influenced  the  employers 
(and  the  employers  desire  to  keep  as  much  money  in  their 
business  as  they  can)  have  either  wholly  neglected  the  ac- 
cumulation of  the  amount  necessary  to  make  these  pay- 
ments without  making  an  Increase  of  assessment  upon  the 
members  of  the  mutual  company,  or  else  have  partially 
failed.  Even  in  Sweden,  where  they  have  the  right  to  go 
to  the  government  and  buy  of  it  an  annuity  based  upon  the 
impaired  life,  they  do  not  exercise  it.  Stock  companies  in 
Sweden,  almost  invariably,  when  they  find  a man  is  totally 
and  permanently  disabled,  go  to  the  government,  and,  if 
they  can  make  proper  arrangements  according  to  their 
judgment,  purchase  an  annuity  and  free  themselves  from 
liability.  But  the  mutual  companies  do  not;  and  nearly 
all  of  them  are  in  a precarious  condition,  some  of  them 
in  a failing  condition. 

In  France  they  have  an  additional  feature.  While  the 
government  does  not  require  the  employer  to  insure  at  all, 
and,  if  he  does  insure,  does  not  dictate  in  what  company  he 
shall  insure,  it  does  provide  that  all  employers  shall  pay 
a certain  very  small  fraction  of  one  per  cent  (I  have  for- 
gotten the  amount)  of  his  payroll,  to  the  state,  as  a special 
tax,  and  that  this  tax  shall  go  into  a fund  which  guaran- 
tees the  solvency  of  the  insurance  company,  if  the  em- 
ployer is  insured,  and  the  solvency  of  the  employer  if  he  has 
not  insured  at  all.  That  is  to  say,  in  case  the  working- 
man  and  his  family  should  lose  their  benefits  because  of 
the  iailure  of  the  insurance  company,  if  the  employer  has 
paid  for  insurance,  or  because  of  the  failure  of  the  em- 


.300 


ployer  if  lie  is  not  insured  at  all,  those  benefits  iminediatelj 
become  payable  out  of  that  state  fund. 

In  most  of  these  countries  the  employer  does  not  escape 
liability  by  insuring.  There  are  exceptions  to  this.  For 
instance,  as  I have  stated,  he  does  in  France,  by  means  of 
this  fund.  In  Belgium  he  escapes  liability  entirelj^,  if  he 
insures  in  a Belgium  company.  They  give  that  much  ad- 
vantage to  their  home  companies.  But  instead  of  working 
to  the  advantage  of  Belgian  employers,  it  has  practically 
removed  the  Belgian  company  out  of  the  competition  and 
put  it  in  a class  by,  itself.  The  result  has  been  that  the 
home  companies  take  nothing  but  risks  that  are  very  slight 
and  where  the  premiums  pay  a very  large  margin  of  profit, 
and  the  really  good  sendee  in  the  matter  of  protection  that 
is  being  performed  in  Belgium  is  by  British,  Dutch,  French 
and  Swiss  companies.  The  home  companies,  in  other 
words,  are  practically  failing  to  perform  the  functions  for 
which  they  were  established.  Corporations  controlled  by 
their  stockholders,  and  others  that  have  particularly  high 
class  risks,  and  where  it  pays  very  handsomely  are  the  only 
ones  they  insure. 

You  know  about  Germany  and  also  Norvmy.  In  Nor- 
way it  is  state  insurance  pure  and  simple.  And  I am  com- 
pelled to  tell  you  that  Norway  furnishes  employers’  liabil- 
ity insurance  cheaper  than  any  other  country  in  the  world ; 
cheaper  than  Germany,  even. 

I am  afraid  I am  taking  too  much  time,  and  perhaps  I 
have  described  to  you  pretty  much  all  that  is  of  any  im- 
portance. 

Mr.  Gillette : If  anything  further  occurs  to  you,  would 

you  put  it  in  the  report? 

Mr.  Dawson : I think  that  would  be  the  wisest  course. 

Mr.  Gillette : What  did  you  find  about  the  agitation  in 


301 


anj  of  these  countries  for  a change  in  the  scale  of  compen- 
sation? Was  there  any  agitation  in  England  or  France  or 
in  Germany? 

il/r.  Daicson:  In  England  it  is  fifty  per  cent,  in  all 

other  countries  it  is  at  least  sixty.  I think  we  did  not  find 
any  trace  of  such  agitation.  Did  you,  Dr.  Frankel,  that 
' you  recall? 

Dr.  Frankel:  Not  in  general.  The  invalidity  compen- 

sation in  Germany  is  too  low;  that  is  generally  thought. 

Mr.  Gillette:  One  of  the  fears  in  this  country  has  been 

that  there  would  be  continual  political  agitation  at  every 
session  of  the  legislature  to  change  the  compensation  ori- 
ginally^ established. 

Mr.  Daioson : I would  like  to  add  one  thing.  I have 

spoken  about  Avhat  things  have  proved  practicable  in  oth- 
er countries.  I believe  any  one  of  those  things  could  be 
done  in  this  country.  And  I have  the  impression — ^this  is 
a rather  radical  statement  but  I am  very  confident  it  is 
true — that  the  thing  which  is  to  most  minds  most  radical 
and  most  revolutionary  would  be  the  least  objectionable 
from  a constitutional  standpoint  in  the  United  States,  and 
that  is,  state  insurance.  There  are  no  restrictions  upon 
the  taxing  power  of  our  states.  The  state  of  Minnesota, 
for  instance,  could  tax  every  manufacturer  in  it,  basing  the 
tax  Upon  the  payroll,  if  it  chose  to  do  so.  There  is  no  re- 
striction Upon  the  purposes,  so  long  as  they  are  public,  for 
which  taxes  may  be  raised.  They  may  be  raised  to  take 
care  of  men  who  have  been  injured,  and  the  families  of  men 
who  have  been  killed.  The  straightest  and  easiest  road  in 
the  United  States,  constitutionally,  would  be  state  insur- 
ance— as  improbable  as  it  is  that  any  such  system  will  be 
introduced. 

Q..  Has  not  the  effect  of  the  compensation  law  in  Eng- 


302 


land  been  to  make  the  employer  more  careful  in  tlie  selec- 
tion of  employees,  and  far  more  difficult  for  the  a^ed  or  de- 
crepit or  persons  in  poor  liealtli  to  obtain  employment? 

Mr.  Dawson:  There  is  a i?ood  deal  of  objection  in  Eng- 

land, on  tlie  part  of  workingmen,  to  tlie  operation  of  the 
law  throug]i  private  insurance  companies,  on  the  ground 
tliat.tlie  companies  do  discriminate,  wliere  tlie  employer  is 
not  careful  in  tliat  respect;  and  particularly  on  the  ground 
that  occasionally  the  companies  require  employers  to  black- 
list particular  individuals  that  have  been  malingering.  1 
have  an  impression  there  is  very  little  basis  for  that.  I did 
not  find,  in  talking  with  the  manager  of  one  of  the  large 
companies  there,  that  there  was  any  basis  for  it  at  all.  He 
said  his  company  had  paid  no  attention  to  such  a matter. 

Q.  In  England  is  it  a lump  compensation? 

Mr.  Dawson:  In  case  of  death,  it  is  three  year’s  Avages. 

The  compensation  in  the  event  of  disablement,  in  England, 
is  fifty  per  cent  of  the  wages  as  long  as  the  man  remains 
disabled. 

Q.  I didn’t  knoAv  but  that  feature  might  make  a dif- 
ference in  the  selection  as  against  the  aged  and  the  de- 
crepit— Avhether  they  Avere  paid  lump  sums  or  not. 

Mr.  Dawson : I think  it  does  make  a difference. 

Q.  If  they  Avere  paid  by  the  annuity  iinethod,  it  would 
tend  to  aAmid  that  discrimination. 

Mr.  Daicson  : That  is  true. 

The  Chairman:  Gentlemen,  there  are  only  six  minutes 

left  before  the  bus  leaA^.es  for  the  train.  I wish  to  announce 
as  the  committee  provided  for  this  afternoon,  Mr.  Mercer 
of  the  Minnesota  Commission ; Mr.  Sanborn  of  the  Wiscon- 
sin Commission ; Mr.  Seager  of  the  New  York  Commission ; 
as  representative  of  employers,  Mr.  Gillette  of  the  Minne- 
sota Commission;  as  representatiA^e  of  labor,  Mr.  Mitchell 


303 


of  the  New  York  Commission as  actuary,  Mr.  Dawson. 

I feel  that  we  ought  to  express  to  those  who  organized 
this  conference  the  appreciation  we  feel  at  the  splendid  at- 
tendance that  we  have  had  and  the  interest  which  has  been 
» displayed.  I feel  that  the  conference  has  been  an  extreme- 
ly valuable  one  to  me  personally,  and  to  others.  It  has 
brought  out  this  point,  clearly,  that  from  whatever  view- 
point Ave  may  look  at  it,  the  employer  is  thoroughly  dis- 
satisfied Avith  the  present  situation  in  the  United  States; 
the  employee  is  equally  dissatisfied;  the  insurance  com- 
panies (Avhich  are  trying  to  perform  a Amluable  public 
function)  are  likewise  dissatisfied.  It  follows  that  we 
should  have  some  new  method  of  liandling  this  problem.  As 
said  by  Mr.  IJlaine,  the  three  parties  to  the  controversy,  all 
of  which  have  a great  interest  in  it,  and  each  of  which  has 
a right  to  have  liis  interest  considered,  haA^e  all  come  to  the 
conclusion  that  AA^e  ought  to  do  something.  Starting  from 
that  viewpoint,  it  seems  to  me  that  at  the  next  conference 
we  ought  to  be  able  to  do  something  that  all  concerned 
could  agree  upon. 

If  there  is  no  further  business,  we  Avill  declare  the  con- 
ference formally  adjourned. 


304 


The  following  communication  was  received  in  time  to 
be  read  at  tlie  Conference,  but  as  there  Avas  no  dispute 
then  as  to  the  desirabilit}’^,  and  tlie  time  before  adjourn- 
ment Avas  fixed,  this  article  was  not  read.  It  was  shown 
to  the  insurance  men.  It  was  therefore  not  discussed. 

Secretary. 

Minneapolis,  Minn.,  July  23,  1909. 
Hon.  H.  y.  fiercer.  Chairman, 

Minnesota  Emjjloyes’  Compensation  Commission, 
Minneapolis,  Minn. 

Dear  Sir : — 

You  have  been  kind  enougli  to  say  that  the  Commission 
AA'ould  welcome  some  comment  from  me  regarding  the  mat- 
ter of  industrial  accident  insurance  as  vieAved  from  the 
standpoint  of  the  EmploA^ers’  Liability  Insurance  Com- 
panies. Wliile  anytliing  I might  contribute  to  this  sub- 
ject could  no  doubt  be  better  and  more  authoritatively  said 
by  an  officer  of  one  of  the  companies,  I may  perhaps  be 
able,  from  nearly  twenty  years  practical  experience  in  the 
business,  to  point  out  certain  features  which  are  apt  to  be 
lost  sight  of  in  any  purely  academic  discussion  of  the  ques- 
tion. 

In  attempting  to  do  this  I may  say  some  things  which 
will  lay  me  open  to  the  charge  of  being  a reactionary,  but 
I shall  take  that  risk,  believing  that  debate  is  helpful  to 
the  solution  of  any  social  problem  and  that  you  and  your 
fellow  members  on  the  Commission  will  be  aided  rather 
than  hindered  in  your  work  by  a presentation  of  opposing 
as  well  as  favorable  facts  and  arguments.  At  any  rate, 
this  is  too  big  a question  and  too  far  reaching  in  its  ulti- 
mate effects  to  decide  on  ex  jmrte  evidence  and  therefore  I 
shall  endeavor  to  give  you  the  ^^other  side  of  the  case,”  con- 


305 


fining  myself  to  those  aspects  of  the  matter  most  likely  to 
be  overlooked  by  tliose  who  are  so  enthusiastically  work- 
ing to  perfect  an  immediate  and  sweeping  reform. 

In  the  first  ijlace,  I believe  there  is  a very  considerable 
misapprehension  in  the  public  mind  as  to  the  difficult}^ 
whicli  confronts  the  injured  workman  in  securing  relief 
from  liis  employer.  We  are  led  to  believe  from  highly  col- 
ored articles  in  the  popular  magazines  that  the  case,  for  in- 
stance, of  the  maimed  switchman  who,  with  his  family, 
was  reduced  to  abject  poverty  for  a period  of  seven  years 
while  awaiting  the  outcome  of  a battle  between  liis  tliird 
rate  attorney  and  the  legal  forces  of  a powerful  railway 
corporation,  is  a typical  one.  On  tlie  contrary,  such  a case 
is  the  very  rare  exception,  }’et  because  of  the  unusual  and 
important  legal  questions  which^may  have  been  involved, 
it  becomes  celebrated,  is  widely  quoted  in  the  law  books, 
and  attracts  a deal  more  attention  tlian  the  thousands  of 
other  cases  which  are  peaceably  settled  without  litigation 
^ every  week  in  the  year. 

During  the  year  1908  the  casualty  company  wliich  I 
represent  liandled  for  employers  of  labor  engaged  in  mis- 
cellaneous industries  in  the  territory  under  my  supervis- 
ion no  less  than  369G  accident  cases.  Out  of  these  have 
grown  55  law  suits,  of  which  28  were  settled  out  of  Court. 
Thus  in  but  of  the  accidents  reported  was  suit  com- 
menced and  in  only  7/10  of  1%  was  it  permitted  to  go  to 
trial.  Wiiile  1908  was  a somewhat  unusual  year  with  us 
in  this  respect,  we  having  settled  a larger  percentage  of 
cases  out  of  Court  than  formerly,  still  our  records,  cover- 
ing more  than  35,000  cases  handled  in  this  territory  since 
1892,  show  the  ratio  of  suits  brought  to  accidents  reported 
during  that  period  to  have  been  but  a trifle  over  2%,  while 
suits  actually  contested  represent  only  about  1%  of  the  ac- 


300 


cideiits.  I am  inforiiied  that  during  tlie  same  period  my 
company  received  from  the  country  at  large  270,858  acci- 
dent notices  and  on  these  tliere  were  5539  suits,  tlie  raticr 
of  suits  to  accidents  being  almost  exactly  the  same  as  jn 
mj  territ(M'y  alone,  which  comprises  Minnesota  and  adja- 
cent States.  I think  you  will  agree  with  me  that  in  the 
face  of  the  foregoing  there  is  small  ground  for  the  claim 
that  disabled  workmen  commonly  have  no  other  redress 
than  in  actions  at  law  against  their  employers. 

And  I would  like  to  emphasize  here  the  fact  that  liabil- 
ity insurance  companies  are  mainly  responsible  for  the 
liberal  treatment  whicli  injured  workmen  are  today  re- 
ceiving as  compared  with  the  })ittances  often  grudging!}^ 
given  them  by  their  employers  thirty  years  ago,  before  this 
form  of  insurance  had  become  a generally  recognized  busi- 
ness necessity.  In  those  days,  when  the  relief  came  from 
the  employers’  own  pocket,  he  was  naturally  inclined  to 
look  upon  it  as  a matter  of  pure  charity,  the  rights  of  the 
injured  being  but  rarely  considered.  The  employe,  on  the 
other  hand,  hesitated  to  enforce  his  claim,  knowing  that 
the  loss  would  fall  solely  ujmn  his  employer.  But  the  ad- 
vent of  liability  insurance  and  its  subsequent  evolution 
gradually  changed  all  this  until  now  every  intelligent 
workman  understands  that  his  employer  is  indemnified 
and  that  the  loss  will  be  shifted  onto  other  shoulders.  In 
the  early  history  of  this  business  some  of  the  leading  com- 
panies adopted  the  policy  of  resisting  nearly  every  sub- 
stantial claim,  and  their  course  in  this  respect,  although 
long  since  abandoned,  still  furnishes  material  for  argu- 
ment for  those  who  look  upon  liability  insurance  as  an 
inhuman  and  cold-blooded  institution.  Today,  the  prac- 
tice witli  respect  to  settlements  is  radically  different.  In 
my  own  agencj^,  for  instance,  are  employed  seven  trained 


I 


307 

investigators  and  adjusters,  whose  first  business  on  re- 
ceiving notice  of  an  accident  is  to  fully  determine  the  ex- 
act facts  relative  thereto.  Their  investigations  are  made 
from  the  view  point  of  a plaintiff’s  rather  than  a defend- 
ants attorney.  In  other  words,  they  search  out  every 
fact,  no  matter  how  trivial  or  remote,  on  which  a cause  of 
action  might  be  based,  instead,  as  in  the  early  days,  of  con- 
fining their  efforts  to  building  up  a bomb-proof  defense. 
If  the  case  is  found  to  present  even  latent  features  of  dan- 
ger, our  adjusters  immediately  endeavor  to  effect  an  amica- 
ble settlement  with  the  injured,  and  nine  times  out  of  ten 
these  settlements  are  made  directly  with  liim,  without  the 
intervention  of  an  attorney  in  his  behaif.  It;  is  my  opin- 
ion that  the  great  majority  of  American  wage  earners  who 
are  engaged  in  occupations  dangerous  to  life  or  limb  are 
vastly  better  compensated  for  their  injuries  than  ever  be- 
fore in  the  history  of  the  country,  and  on  the  average,  ma- 
terially better  than  those  engaged  in  like  occupations  in 
any  foreign  country.  For  this,  the  institution  of  liability 
insurance  as  it  has  been  developed  during  the  past  twenty- 
five  years  is  chiefly  responsible.  The  thanks  of  both  Capi- 
tal and  Labor  are  also  due  to  the  casualt}'  companies  for 
the  instances  without  number  where  an  employer  would 
have  been  forced  into  bankruptcy  had  it  not  been  for  the 
liability  insurance  which  he  carried  and  Avhich  enabled 
him  to  pay  an  otherwise  worthless  judgment  of  tliousands 
of  dollars  recovered  by  an  injured  workman,  and  which 
permitted  him  to  continue  operations  and  keep  his  other 
woi  kmen  employed. 

A wideh^  accepted  fallacy  with  respect  to  personal  in- 
jury litigation  is  that  not  only  must  the  injured  sue  his 
claim  in  order  to  secure  compensation,  but  that  when  judg- 
ment is  recovered  he  must  pay  50%  of  it  over  to  his  attor- 


308 


ney.  In  tlie  jiiclginents  obtained  against  onr  clients  dur- 
ing the  past  five  years  Ave  lia.ve,  so  far  as  possible,  kept 
track  of  tlie  fees  paid  by  tlie  injured  to  their  attorneys  and 
onr  figures  indicate  tliat  the  average  contingent  fee  chiirg- 
ed  by  personal  injury  lawyers  in  tli  is  section  of  the  conn  try 
is  not  more  than  25%  of  the  ainonnt  recovered,  Avhich  goes 
to  show  tliat  there  is  competition  in  the  ambulance  chasing 
business  as  well  as  elseAvhere  and  that  working-men  are 
alive  to  that  fact.  I hold  no  brief  from  the  professional 
(or  nn-professional,  as  you  choose)  gentl^men  who  foment 
litigation  of  this  character.  They  are  a very  decided  thorn 
in  onr  fiesh  and  Avere  it  not  for  them  and  their  ])ractices 
the  business  of  liability  insurance  Avonld  l>e  a much  easiei 
and  simpler  one  than  it  is.  XeAnrtheless,  let  ns  giA^e  the 
devil  his  due  and  admit  that  from  the  standpoint  of  the 
Avage  earner  avIio  is  too  poor  to  lay  doAvn  a good  sized  re- 
tainer before  a corporation  attorney,  the  damage  suit  Iuan  - 
\ 

yer  is  not  alAAvays  an  unmitigated  eAul.  If  he  risks  his  time, 
and  often  more  or  less  money,  in  an  effort  to  procure  sub- 
stantial damages  for  his  client,  it  is  but  fair  that  he  should 
receive  a larger  proportionate  fee  than  the  laAAwer  who 
takes  no  such  chances. 

Another  thing  which  those  who  are  conscientiously  study- 
ing this  question  with  open  minds  should  have  their  atten- 
tion called  to  is  that  most  AAU’iters  who  address  themselves 
to  the  subject  of  industrial  accidents  evince  a fondness  for 
citing  the  .mortality  statistics  of  the  ultra-hazardous  em- 
ployments, and  the  peculiarly  harsh  conditions  of  compen- 
sation which  exist  in  certain  notable  localities,  instead  of 
making  their  deductions  from  a broader  range  of  statistics 
and  from  more  generally  prevalent  conditions.  The  City 
of  Pittsburg  and  its  environs  is  particularly  fertile  soil  in 
this  respect.  For  example,  in  a very  interesting  paper  en- 


309 


titled  ^^The  Ainericau  War  of  Distributing  Industrial  Ac- 
cident Losses/'  read  by  Miss  Chrystal  Eastman  before  the 
American  Association  of  Labor  Legislation  at  Atlantic 
City  last  December,  some  very  sweeping  conclusions  were 
drawn  based  apparently  upon  investigations  made  solel}' 
in  and  about  Pittsburg.  Among  other  things,  Miss  East- 
man relates  that  in  242  cases  of  fatal  accident  occurring  in 
Allegheny  Countj^,  Pennsylvania,  the  dependent  families  of 
88  of  tlie.deceased  employes  received  not  one  dollar  of  com- 
pensation, 92  received  barely  enough  to  cover  funeral  ex- 
penses, Avhile  the  remaining  62  received  each  less  than 
$500.  I have  no  reason  to  doubt  the  accuracy  of  these  fig- 
ures, yet  it  seems  manifestly  unfair  to  dub  the  American 
system  as  un-American  chiefly  on  the  strength  of  an  extra- 
ordinary situation  in  a comniunit}’  which  in  more  respects 
than  one  does  not  typify  average  American  conditions.  It 
has  in  fact  often  occurred  to  me  that  the  present  agitation 
for  the  introduction  of  a European  system  of  compensa- 
tion may  have  had  its  inception  in  Pittsburg.  The  per- 
centage of  foreign  labor  there  employed  is  overwhelmingly 
large  and  from  all  accounts  it  would  certainly  seem  that 
nowhere  else  in  the  United  States  could  the  foreigner  so 
justly  compare  the  European  and  the  American  methods  of 
compensation  for  accidents,  to  the  disadvantage  of  the  lat- 
ter. If,  instead  of  stopping  at  the  Allegheny  River,  the 
immigrant  would  continue  to  Illinois,  Wisconsin  or  Min- 
nesota, he  would  find  that  the  average  serious  injury  has  a 
materially  higher  commercial  value  there  than  in  any 
European  country. 

Not  a few -well-meaning  people  are  of  the  opinion  that 
liabilit}^  insurance  i^  contrary  to  public  policy, — ^that  it 
tend.s  to. make  the  employer  le^  careful  in  the  safe-guard- 


310 


ing  of  Ills  inacliinery,  etc.  To  this  I would  reply  tliat  lia- 
bility^ coiiipaiiies,  with  their  eflicieiit  inspection  bureaus, 
are  today  in  iny  judgment  doing  more  practical  good  in  the 
direction  of  bettering  the  pliysical  hazard  (if  the  risks  they 
insure  than,  witli  jiossibly  two  or  three  exceptions,  is  being 
done  by  any^  State  inspection  bureau.  Most  employers 
seem  to  have  little  fear  of  the  trifling  penalties  imposed  fur 
the  violation  of  the  factory^  laws  of  the  various  states,  es- 
pecially as  tiiese  penalties  are  rarely  enforced.  -The  man- 
date of  the  insurance  company,  on  the  other  hand,  carrying 
with  it  an  implied  and  often  actual  threat  of  cancellatioii 
of  tlie  insurance  should  the  inspector's  recommendations 
not  be  complied  with,  is  not  lightly  ignored.  As  between 
the  latter  sy^stem  and  one  under  which  every  employe er  will 
be  made  equally  liable  for  all  accidents,  no  matter  how 
much  or  how  little  care  he  may  have  exercised  to  prevent 
them,  it  would  seem  that  opinion  could  not  differ  as  to 
where  lies  the  greater  incentive  to  caution. 

There  are  other  students  of  the  question  who  hold  that 
because  liability  insurance  companies  collect  in  premiums 
from  their  clients  an  amount  in  excess  of  the  compensation 
actually^  paid  to  disabled  employes,  there  exists  a needless 
^^waste”  which  should  be  eliminated.  They  overlook  the 
fact  that  n^  insurance  company,  whether  life,  fire  or  acci- 
dent, can  successfully  operate  its  business  without  expense, 
and  that  neither  the  State  nor  Federal  G-overnment  could 
administer  an  efficient  compensation  law  without  a very 
considerable  operating  cost.  Even  the  dollar  which  we 
give  to  an  organized  charity  of  any  kind  does  not  in  full 
reach  the  beneficiary  whom  we  seek  to  aid.  It  is  necossa- 
rily  subject  to  some  shrinkage  in  order  that  it  may  pay  its 
quota  of  the  operating  expenses  of  such  oharity.  This 
much  can  certainly  be  said  for  the  liability  companies, — 


311 


that  their  paid  losses  the  countrjr  over  today  represent  a 
larger  proportion  of  their  gross  premium  incomes  than  is 
the  case  Avith  the  fire  companies,  yet  Ave  hear  of  no  demand 
that  any  of  our  states  shall  go  into  the  fire  insurance  busi- 
ness in  order  to  cheapen  the  cost  of  that  form  of  protection 
to  its  citizens.  In  this  connection,  I Avould  point  out  that 
much  that  has  recenth^  been  said  in  criticism  of  Employer's 
Liability  Insurance  is  based  upon  inaccurate  and  mislead- 
ing data.  Most  casualty  companies  do  a multiform  busi- 
ness, ranging  from  plate  glass,  boiler,  burglary  and  fidelity 
to  liability  insurance.  Several  of  the  companies,  in  fact, 
AA^rite  a dozen  or  more  different  kinds  of  insurance,  some  of 
Avhich,  notably  boiler  insurance,  have  necessarily  high  ex- 
pense and  correspondingly  1oa\^  loss  ratios.  A common 
error  on  the  part  of  our  opponents  is  to  quote  the  gross  in- 
come and  outgo  figures  of  the  casualty  companies,  includ- 
ing all  branches  of  their  business,  to  proA^e  an  apparent  but 
not  real  ^Svaste”  in  the  single  item  of  Employer  s Liability. 
There  are  today  nearly  tAA^entj^  companies  Avriting  the  lat- 
ter form  of  insurance  in  this  country  and  if  any  of  our 
friends  Avho  believe  there  is  a large  profit  in  the  business 
care  to  go  deeply  into  the  matter,  I A\ill  venture  to  say  they 
■ AAull  find  that  the  companies  as  a body  have  not  derived  an 
underAAunting  profit  of  5%  from  their  Employer’s  Liabil- 
ity AA^ritings  during  the  past  ten  years.  In  the  State  of 
Minnesota,  for  example,  the  loss  ratio  has  been  steadily 
creeping  up  until  last  year  it  reached  approximately  TO^o 
- as  against  a 45%  loss  ratio  suffered  by  the  fire  companies. 

I am  aAAmre  that  there  are  many  AA^ho  favor  the  adoption 
of  a system  of  compensation  similar  to  that  of  Great  Brit- 
ain, AA^hich  Avmuld  tend  to  extend  rather  than  restrict  the 
field  for  liability  insurance,  but  there  appear  to  be  others 
Avho  believe  A\^e  should  adopt  a plan  of  State  Control  pat- 


312 


terned  aifter  the  German  system,  under  whicli  tlie  func- 
tions of  liahility  'companies  would  cease  except  in  those 
cases  of  personal  injury  where  the  relationship  of  master 
and  servant  does  not  exist.  I will  leave  for  legal  minds  the 
prohlem  of  how  to  adapt  such  a system  to  the  requirements 
of  our  fundamental  law,  both  Federal  and  State — a system 
which  at  once  deprives  the  employer  of  property  rights  and 
bars  the  employe  from  adequate  redress  for  damages  neg- 
ligently caused;  instead,  I will  quote  the  views  of  a promi- 
nent'^English  Government  official  respecting  the  advisabil- 
ity of  any  attempt  to  administer  industrial  insurance  with- 
out the  aid  and  co-operation  of  those  especially  qualified 
by  training  and  experienGe  for  such  work.  After  criticiz- 
ing at  length  certain  defects  in  the  English  system  and 
pointing  out  what  he  believed  to  be  proper  remedies  there- 
for, the  Honorable  Lloyd-George,  Chancellor  of  the  Eng- 
lish Exchequer,  in  a speech  presenting  his  recent  budget 
to  the  House  of  Commons,  said : 

- ^^In  this  country,  where  benefit  and  provident  socie- 
ties of  all  kinds  represent  the  triumph  of  organization, 
of  patience  and  of  self-government  which  is  unparal- 
leled in  the  history  of  any  country,  no  scheme  would 
be  profitable,  no  scheme  would  be  tolerable  which 
would  do  the  least  damage  to  those  highly  beneficient 
organizations.  On  the  contrary,  it  must  be  the  aim  of 
every  well  'Considered  plan  to  encourage  and  to  work 
through  them.’’ 

If  I were  asked  for  a practical  suggestion  looking  to  the 
betterment  of  the  present  method  of  compensation  for  in- 
dustrial accidents  in  this  country,  one  which  would  give 
the  greatest  good  to  the  greatest  number  and  at  the  same 
time  preserve  the  admitted  usefulness  of  the  institution  of 
liability  insurance,  I would  recommend  first  the  adoption 
of  a uniform  liability  law  by  the  various  states,  one  which 


313 


would  define  with  more  certainty  the  grounds  on  which 
recovery  may  be  had  and  which  would  give  the  same  maxi- 
mum benefits  to  all.  Such  a law  would  equalize  the  absurd 
differences  now  existing  where  a human  life  is  worth  $5000 
in  one  state  while  no  limit  whatever  is  placed  upon  it  in  an 
adjoining  state;  where  a factory  worker  on  one  side  of  a 
river  is  able  to  secure  by  legal  right  a substantial  sum  for 
the  loss  of  his  leg,  while  his  fellow,  sustaining  a.  similar  in- 
jury under  substantially  the  same  circumstances  in  a fac- 
tory across  the  river  but  in  a different  state,  can  recover 
nothing.  Such  a- law  should  not  only  name  a maximum 
limit  for  fatal  accidents,  hut  also  maximum  limits  for  spe- 
cific permanent  injuries,  such  as  the  loss  of  an  arm,  leg, 
hand,  foot,  eye,  etc.  My  experience  and  observation  would 
* indicate  that  not  over  10%  of  all  accidents  reported  come 
under  the  above  heads  and  that  most  of  the  remaining  90% 
are  of  an  extremel}^  trivial  character  where  the  disability 
is  at  most  of  but  a few  weeks  duration  and  where  no  griev- 
ous financial  hardship  is  inflicted  upon  the  injured  or  his 
family.  It  is  the  ten  important  accidents  out  of  each  one 
hundred  occurring  that  seriously  affect  the  injured,  his 
family  and  society  at  large;  it  is  these  with  which  social 
vrorkers  and  students  of  economics  are  chiefly  concerned. 
It  would  seem  that  a practicable  and  equitable  method, 
could  be  devised  for  their  treatment  without  so  completely 
overthrowing  the  present  system  that  the  indolent  work- 
man who  careless!}"  pinches  his  finger  is  tempted  to  loaf 
two  or  three  weeks  for  the  salie  of  the  partial  wage  which 
a sweeping  compensation  law  would  compel  his  employer 
to  pay  him.  It  is  the  prevalent  malingering  in  connection 
with  ordinary  injuries  which  constitutes  one  of  the  chief 
weaknesses  of  the  European  systems  and  it  is  contempla- 


314 


■; 


tioii  of  tlie  enormous  cost  of  footiii<»-  the  bills  in  these  cases, 
iiulividnally  nnimportant  but  in  the  agi»Te<^ate  most  costly 
than  all  serious  injuries  combincHl,  which  leads  so  many 
American  employers  to  hesitate  about  lending  their  eii- 
dorsemeut  to  a scheme  under  which  they  will  become  in 
fact  the  direct  insurers  of  their  workmen.  Nevertheless,  I 
am  hopeful  that  out  of  the  jaesent  agitation  some  i)lan  may 
be  evolved  which  will  contain  the  best  features  of  the  Eu- 
ropean systems  and  at  the  same  time  not  prove  radically  at 
variance  with  onr  institutions.  ^Manifestly,  the  German 
compulsory  system  in  all  its  features  is  not  adapted  to  our 
requirements.  That  system  is  the  outgTo^^i:h  of  economic 
and  social  conditions  under  which  whole  families  have  for 
generations  been  dependent  on  the  same  trade  and  often 
the  same  employing  concern  for  their  livelihood.  It  may 
be,  and  probably  is,  a capital  system  for  Germany,  but  in 
the  judgment  of  many  close  thinkers,  it  is  not  suited  to  ex- 
isting American  conditions. 

The  better  element  of  the  Bar  advocates  a change  in  the 
present  metlu>d  of  compensation  for  industrial  accidents 
in  order  that  the  congestion  in  our  courts  growing  out  of 
personal  injury  litigation  may  be  relieved,  but  the  fact 
should  not  be  overlooked  that  under  the  operation  of  any 
Compensation  Act  questions  are  bound  to  continually  arise 
which  the  courts  will  be  called  upon  to  decide.  The  his- 
tory of  the  English  Compensation  Act  of  1907  shows  that 
many  new  and  novel  questions  have  come  up  for  determina^ 
tion  resulting  from  differences  of  opinion  as  to  the  inter- 
pretation of  that  very  carefully  framed  measure.  Even 
should  the  various  states  concurrently  enact  an  identical 
law  on  the  subject,  and  one  entirely  free  from  ambigaiities, 
it  still  follows  that  under  the  actual  operation  thereof 
many  disputed  claims  will  arise  and  adequate  machinery 


315 


of  some  sort  must  be  proyiclecl  for  their  proper  adjustment. 
If  this  Avork  is  to  be  taken  ont  of  the  hands  of  the  courts, 
then  public  or  priA’ate  arbitration  must  be  resorted  to. 
Tliere  will  always  be  questions  under  auA’  law  of  this  kind 
as  to  whether  or  not  the  injured  was  in  fact  an  emploA^e  at 
the  moment  of  the  accident,  and  as  to  the  probable  period 
of  his  disability,  while  in  the  case  of  fatal  accidents  ques- 
tions will  frequently  arise  as  to  tlie  extent  to  Ayhicli  the 
beneficiaries  were  dependent  upon  tlie  deceased  for  sup- 
port. 

View  tlie  subject  from  any  angle  we  choose,  eudeayor 
conscientiously  as  we  may  to  keep  before  ns  its  humane  as- 
pects, the  Avhole  ]n\obleni  is  necessarily  an  economic  one 
and  in  its  final  analysis  we  must  count  the  cost.  That  any 
scheme  which  proyides  compensation  for  practically  all 
injuries,  regardless  of  their  seyerity  or  the  circumstances 
under  Ayhich  they  occur,  tyill  cost  somebody — ^the  employer, 
his  Ayorkmeu,  the  insurance  company  or  the  State — a deal 
more  than  the  present  system,  is  too  patent  to  require  ar- 
gument. Just  how  iiincli  more  expensiye  it  will  be  is  lai^ge- 
ly  a matter  of  conjecture,  although  Aye  do  know  that  the 
changed  conditions  brought  abonf  in  Great  Britain  by  the 
Compensation  Act  of  1907  resulted  in  increasing  the  cost 
of  personal  injury  cases  to  employers  of  labor  many  fold. 
In  the  AAmod  Ayorking  trades  the  ayerage  increase  was  oyer 
ten  fold ; in  the  textile  trades  it  was  six  fold.  But  in  Great 
Britain  the  economic  difficulties  were  insignificant  com- 
pared to  those  Ayhich  must  be  faced  here.  There  the  law 
Ayas  national  in  scope  and  affected  the  cost  of  all  produc- 
tion.alike  so  that  the  additional  tax  was  eased  off  onto  the 
consumer  in  the  shape  of  a uniform  increase  in  the  selling 
price  of  commodities.  Apparently,  we  can  hope  to  accom- 
lish  the  same  results  only  by  simultaneous  and  identical  en- 


31G 


aiCtiiieiit  in  eacli  'state,  for  a I^'ederal  law  seems  out  of  the 
question.  Pending  uniform  action,  it  is  doubtful  if  any  lu- 
dividnal  state  will  take  the  risk  of  handicapping  its  indus- 
tries by  legislating  independently  on  the  subject. 

When  the  subject  of  workmen’s  compensation  insurance 
first  came  before  the  recent  session  of  tlie  Minnesota  Legis- 
lature, I circularized  over  one  thousand  of  our  leading  cns- 
toiners  in  this  state,  with  a view  to  ascertaining  what  per- 
centage of  reduction  in  their  customary  net  earnings  would 
result  from  an  increase  in  the  cost  of  their  liability  insur- 
ance amounting  to  from  200%  to  500%.  In  answer  to  this 
letter  a considerable  amount  of  very  interesting  informa- 
tion was  received,  and  not  a few  of  our  clients  gave  strenu- 
ous expression  to  the  belief  that  any  system  which  thus  con- 
templated a material  increase  in  the  cost  of  production 
would  place  the  industries  of  this  State  at  a marked  disad- 
vantage when  in  competition  with  those  of  other  and  especi- 
ally of  adjoining  states  having  no  sjostem.  .One  of  our  cor- 
respondents, a large  employer  of  labor  in  this  city,  wrote 
as  follows : 

‘‘In  view  nf  the  fact  that  we  are  now  competing  in 
Southern  states  Avhere  the  average  wage  is  less  than 
fl.OO  per  day,  if  anjr additional  burden  ranging  any- 
where from  1%  to  5%  on  our  wage  account  is  to  be 
added,  we  fear  Ave  would  have  to  discontinue  this  line 
of  business.  The  only  protection  we  have  now  against 
this  cheap  Southern  labor  is  the  freight,  and  that  is 
every  year  being  reduced  until  it  has  come  to  mean 
only  a A^ery  small  item,  but  on  cheap  goods  the  South- 
ern manufacturer  is  able  to  lay  his  product  down  in 
this  locality  at  a lower  price  than  we  can  afford  to 
make  it.  While  we  have  considerable  competition 
^ from  Michigan,  Indiana  and  Wisconsin,  our  strongest 
competition  on  cheap  goods  comes  from  points  South 
of  the  Ohio  River  Avhere  labor  is  yerj  poorly  paid.” 


317 


The  writer  of  the  foregoing  is  now  paying  for  Employ- 
er’s Liability  Insurance  a rale  of  approximately  one-half 
of  1%  on  the  amount  of  his  annual  payroll.  His  risk  is  of 
the  kind  which  liability  insurance  companies  classify  un- 
der the  ^ Vood  working  schednle.”  Sliould  a compensation 
law  be  enacted  by  this  State  similar  to  that  of  Great 
Britain  and  should  it  result,  as  it  probably  would,  in  a cor- 
responding increase  in  the  cost  of  liability  insurance,  the 
gentleman  referred  to  would  be  compelled  to  pay  a rate  of 
more  than  |5.00  on  each  flOO  of  his  wage  expenditure,  as 
against  the  50c  which  he  is  now  paying.  Obviously,  unless 
a similar  law  were  enacted  in  all  the  states,  this  increased 
item  in  the  cost  of  production  would  put  him  out  of  busi- 
ness entirely, — not  merely  in  competition  with  cheap 
Southern  labor,  but  also  in  competition  with  like  manufac- 
turers in  the  Northern  states. 

I firmly  believe  that  the  systematizing  of  the  Employer’s 
Liability  laws  already  on  the  statute  books  of  many  of  the 
states,  along  the  lines  1 have  indicated,  amplifying  to  some 
extent  the  grounds  for  recovery  and  limiting  the  amounts 
possible  to  recover,  Avould  meet  the  present  exigencies  of 
the  ease  in  so  far  at  least  as  relates  to  the  more  serious  ac- 
cidents. And  when  it  comes  to  the  minor  cases,  a vehicle 
time-tried  and  tested  is  already  at  hand  in  the  shape  of 
what  is  known  as* Workmen’s  Collective  Insurance,  a form 
of  indemnity  written  by  most  casualty  companies  Avhich 
runs  to  the  employer  practically  as  a trustee  for  his  work- 
men. Under  it  the  question  of  negligence  is  not  involved. 
It  is  a sort  of  blanket  accident  policy  devised  for  the  pur- 
pose of  enabling  every  employer  of  labor  to  provide  cer- 
tain and  immediate  relief  for  injured  employes.  It  is  pe- 
culiarly well  adapted  to  take  care  of  the  80%  or  90%  of 
comparatively  unimportant  cases,  Avhere  the  injured  is  not 


318 


])erinaneiitlj  clisaibled,  yet  wlna-e  lie  lof^es  a certain  amount 
of  wages  in  consequence  of  liis  temporary  incapacit3^ 
Tliousauds  of  employers  have  for  many  years  availed  them- 
selves of  this  instrumentality.  The  cost  in  some  instances 
is  borne  entirely  by  the  workmen,  being  considerably 
(dieap(‘i*  than  individual  accident  insurance.  In  other  in- 
stances, the  employer  himself  pays  the  entire  premium, 
while  in  still  others  the  expense  is  shared  between  the  em- 
])loyer  and  employe. 

t^hould  we  go  to  the  extent  of  taking  over  bodily  one  of 
the  European  systems  as  now  administered,  or  devise  one 
of  our  OAvn  based  on  the  same  principle,  where  are  we  going 
to  stop?  Already  there  is  a feeling  that  our  Government 
is  too  paternalistic.  The  German  or  Austrian  system  of 
accident  compensation  transplanted  to  American  soil 
Avould  in  my  judgment  be  the  thin  entering  wedge  which 
would  ultimately  lead  to  sick  benefits,  bid  age  pensions  and 
a variety  of  other  Governmental  gratuities  better  suited  to 
pauper  conditions  than  to  the  encouragement  of  that  stur- 
dy, self  reliant  and  individualistic  spirit  which  has  made 
America  a distinctive  country.  In  conclusion,  I would 
say  that  while  I believe  the  present  methods  of  compen- 
sating injured  Avorkmen  are  susceptible  of  great  improve- 
ment, I as  earnestly  believe  that  many  of  those  who  are 
today  seeking  for  a remedy  take  an  exaggerated  view  of 
the  matter  and  are  misled  in  many  of  their  conclusions  be- 
cause they  are  not  in  possession  of  accurate  statistics  and 
are  not  fully  informed  as  to  the  actual  workings  of  the  ex- 
isting arrangement,  particularly  with  regard  to  the  benefi- 
cient  part  liability  insurance  plays  therein. 

If  the  suggestion  be  permitted,  I should  say  that  the  At- 
lantic City  Conference  could  take  no  more  practical  step 
than  to  perfect  a permanent  organization  and  appoint  a 


319 


standing  committee  consisting  not  only  of  members  of  the 
various  State  Commissions,  social  v^orkers,  students  of 
economics,  etc.,  but  also  at  least  two  representative  liabil- 
ity insurance  men,  one  of  whom  should  be  a trained  under- 
writer and  actuary  and  the  other  a practical  loss  adjuster. 
The  Home  Office  of  any  of  the  leading  casualty  companies 
can  supply  such  men  and  their  assistance  in  the  practical 
working  out  of  this  problem  should  be  of  incalculable 
value  to  the  investigating  body. 

In  the  views  expressed  in  this  letter,  I do  not  desire  to  be 
understood  as  speaking  officially  for  any  Employer’s  Lia- 
bility Company.  I liave  simply  given  you  my  personal 
opinions  based  on  my  own  experience  in  the  business,  as 
was  suggested. 

Very  truly  yours, 

Fred  L.  Gray. 


- utA 


IXDEX. 


The  index  consists  of  three  parts.  The  first  part  gives 
the  pages  npon  which  the  bnsiness  transacted  by  the  con- 
ference may  be  found.  The  second  part  is  a topical  index 
of  the  speeclies  and  discussions.  The  third  part  gives  ci- 
tations to  the  remarks  made  by  eacli  member  of  the  con- 
ference. 


1.  Business  Transacted. 

Call  for  conference. 

List  of  delegates,  1-3. 

Conference  called  to  order  by  H.  V.  ^Mercer,  3. 

Charles  P.  Neill  chosen  chairman,  3-4. 

H.  V.  fiercer  chosen  secretary,  4. 

Mr.  Higgins  appointed  stenographer,  4. 

All  persons  in  attendance  at  conference  eligible  to  vote,  50. 

On  motion  of  ^Mr.  Gillette  a committee  on  permanent  or- 
ganization appointed,  50-51,  279. 

Names  of  committee,  302-303. 

Two  resolutions  by  Mr.  Seager  on  collection  of  statistics 
and  laws,  229-230. 

Russel  Sage  Foundation  offered  co-o^^eration,  244. 

Motion  by  Mr.  Gillette  that  a committee  be  appointed  to 
draw  np  resolutions  expressing  sense  of  conference,  274, 
Withdrawn,  276. 

Suggestion  by  Mr.  Gillette,  on  publication  of  proceedings, 

277. 

Accidents : 

Frankel,  47,  240;  McEwen,  263;  Neill,  6. 

Ambulance  Chasers : 

Blaine,  38;  Gillette,  35;  McEwen,  266;  Neill,  36. 

Bankruptcy,  Compensation,  after : 

Frankel,  253;  Blaine,  253. 

- ' • • 

■ w - p 


Benefit  Associations: 


Frankel,  45-G,  233-44. 

Constitutional  Problems : 

Blaine,  283;  Inj^alls,  288;  fiercer,  54-270. 
Compensation,  ^letliods: 

Blaine,  284-5;  Dawson,  22-23. 

Compensation,  Foreign : 

Dawson,  25,  27,  28,  293-300. 

Compensation,  Workmen  want  it  certain: 

Ingalls,  272. 

Compensation,  a cost  of  production : 

McEwen,  264-5;  Neill,  6-8. 

Cost  of  workmen's  compensation  : 

Dawson,  22-24,  33-35,  261 ; Neill,  261. 

Costs,  Administrative: 

Frankel,  260. 

Costs  of  Employers’  Liability : 

Dawson,  24-25-27 ; Gillette,  24-25. 

Double  Liability : 

Dawson,  28;  Gillette,  219-221-224;  Ingalls,  273-291;  Mc- 
Ewen,  262-267 ; Neill,  217-268;  Parsons,  27,  252;  Rowe, 
29;  Stone,  253. 

Employers’  Liability : 

Frankel,  45-48;  Neill,  5,  37-42,  43-44,  283. 

Economies  don’t  benefit  injured  workmen: 

Blaine,  39. 

Recent  modifications: 

Blaine,  40,  280-3;  Parsons,  32. 

Recoveries  under: 

Gillette,  32-3;  Parsons,  30;  Rowe,  30. 

Wastes : 

Blaine,  43-4;  Dawson,  13-18,  21,  31,  33-4;  Gillette,  24, 
25;  Parsons,  31. 


Litigation : 

Dawson,  25-26. 

Origin  of  American  Laws : 

Neill,  5. 

Poverty : 

Frankel,  48. 

Moral  effects : 

Gillette,  37. 

Cost  increasing: 

McEwen,  173;  Kowe,  30. 

Insurance  companies,  methods : 

Blaine,  38;  Rowe,  30-1. 

Employers’  Obligation : 

Neill,  49. 

Foreign  Laws : 

Dawson,  15-22,  24,  28,  294-6,  301;  Frankel,  37,  232-237, 
244 ; Gillette,  22,  25,  223-4,  228,  245-248. 

Hazards  of  Industry : 

Neill,  5-6. 

Industry,  Protection  fundamental : 

Gillette,  219;  Smith,  292. 

Investigation : 

Gillette,  10-11 ; Neill  217. 

Insurance  Companies : 

Blaine,  38;  Gillette,  11-12;  McEwen,  30-31;  Parsons,  31; 
Petrasch,  32;  Rowe,  30-1. 

Letter,  from ; 

Fred  L.  Gray,  304. 

Litigation : 

Dawson,  25-26,  28;  Gillette,  228. 

Lump  sum  Payments : 

McEwen,  268. 


Mai  ill  Jeering: 

Daw.soii,  254,  2(J1;  Frankel,  245-247. 

State  Contributions : 

Frankel,  241;  McEwen,  207;  Neill,  49. 

New  York  Coniinission : 

Seagar,  274-0. 

Wages : 

Dawson,  19-20;  Neill,  7. 

Wastes  of  Employers’  Liability: 

Dawson,  19,  27. 

AVorkmen’s  Compensation : 

See  ‘^Foreign  Laws.” 

Complexity  of  problem : 

Gillette,  9-10;  Ingalls,  291;  Neill,  7. 
Constitutional  Limitations : 

Ingalls,  291;  Sea  gar,  270. 

Cost,  201. 

Desirability : 

Blaine,  41;  Neill,  4,  8. 

Economical : 

Dawson,  15-22;  Neill,  217. 

Education : 

McEwen,  271. 

Laws,  Limitations  in  scope: 

Blaine,  41-3;  McEwen,  208-209;  Parsons,  252. 
Laws,  types  of: 

Blaine,  284-280.* 

Lump  sum  payments : 

McEwen,  208. 

Practicable : 

Dawson,  301-2;  Frankel,  231. 

Principles : 

Blaine,  43-4;  Frankel,  242-3,  247-257. 


Uniform  laws: 

Gillette,  10;  Mercer,  87;  Xeill,  8. 

Blaine^  John  B.  : 

Ambulance  chasers,  38. 

Bankruptcy,  compensation  after,  253. 

Employers’  Liability,  37-12,  13,  11,  283. 

Economies  don’t  ’benefit  injured,  39. 

Recent  modifications,  10,  187-89,  280-3. 

Wastes,  13-11. 

Liability  Insurance,  metliods,  38. 

Workmen’s  compensation,  10-12,  281-5. 
Desirability,  11. 

Laws  slionld  be  limited  in  scope,  11-3. 
Constitutional  problems,  283. 

Four  possible  types  of  laws,  281-286. 

Risk  of  tlie  industry,  13-11. 

Dawson,  Miles  ^I.  : 

Compensation,  foreign  rates,  25,  27,  28,  293-300. 
Cost,  22-21,  33-35,  261. 

Compensation  of  various  systems,  22-21. 
Employers’  liability  Avastefnl,  13-18,  21,  31,  33-1. 
In  Germany,  261. 

Workmen’s  compensation  economical,  13-22. 
Double  liability,  England  and  France,  28. 
Employers’  liability,  11-26. 

Litigation,  25-26. 

Saves  some  waste,  18-20. 

Wastes,  11,  16,  22. 

Foreign  Laws: 

British,  21-23,  25,  28,  291-6-301. 

French,  23,  27,  296-298-9. 

'Holland,  Sweden  and  Belgium,  296-300. 

German,  21,  21,  259,  261. 


Norway,  300. 

Summary,  298-302. 

Economical,  15-22. 

Litigatinii  less,  25-26. 

Rates,  27. 

Litigation;  less  under  workmen’s  compensation,  25-6-28. 
Principles  nnclerl3nng  workmen’s  compensation,  294-301. 
England,  294-301. 

Holland,  Sweden,  Belgium,  France,  296-300. 
Compulsion,  27. 

Wages;  in  dangerous  occupations,  19-20. 

TN'astes : 

Eliminated  in  Europe,  19. 

Employers’  liability,  14-26. 

England,  Germany,  United  States,  compared,  24. 

Less  under  workmen’s  compensation,  27. 

Workmen's  compensation : 

Economical,  15-22. 

England,  21-23,  25,  28,  294-301. 

Lessen’s  litigation,  25-28. 

Most  successful  in  Germany,  21-22. 

Practicable  in  United  States,  301-2. 

Promotes  industrial  peace,  28. 

Two  ways  of  viewing,  13.  ' * 

Frankel,  Lee  K.  : 

Accidents,  decrease  in  Germany,  124-26,  139 ; In  Austria, 
131. 

Bankruptcy,  compensation  after,  253. 

Benefit  associations,  45-46,  233-44. 

Advisability  of  utilizing,  238. 

Experience  of  other  countries  with,  45-46,  233-244. 
Cost,  administrative,  in  Germany,  260;  United  States, 
260. 


Employers’  liability,  causes  poverty,  45-48. 

English  law,  232-33,  244-6. 

Dissatisfaction,  233,  245.  '' 

Friendly  Societies,  234-238. 

Foreign  Laws : 

Analyzed,  232. 

Successful,  118,  232. 

liussell  Sage  foundation  studies,  243-4. 

Malingering  under,  234,  245-7. 

Nationality,  effect  of,  247. 

^hSee  also  English  Law,”  ^^Gerinan  Law,”  ^^Norwegian 
Law,”  etc. 

German  Laws,  36-7,  234-7,  241,  247. 

Analyzed,  234-237. 

^letliod  of  adjudication,  36-7. 

Proportion  of  disputes,  36. 

Popular,  138,  244. 

Workingmen’s  contributions,  240. 

Malingering,  245-7. 

Norv/egian  Law,  237. 

Sickness  Clubs,  238-9,  239-240,  246-7. 

State  Insurance,  237. 

State  Contributions,  241. 

Swedish  Law,  234. 

State  Insurance  department,  234. 

Swiss  Law,  237-8,  241. 

State  Contributions,  241. 

Workman’s  Compensation: 

Practicability,  231. 

Principles  of,  242-3,^  247-257. 

Compulsory  or  voluntary,  248-250,  255. 

Limitation  in  scope,  250-251. 

'Protection  of  employee,  258. 

Utilization  of  insurance  companies,  151-2,  238-255c 


Gillette,  George  M.  : 

Ambulance  cliascrs,  35. 

Double  Liability,  im])racticable,  219  221-224. 

Eiu])loyers’  liability : 

Wastes,  24-25. 

Recoveries  in  Minnesota,  32-3. 

]Moral  effects,  37. 

Insurance,  solution  will  probably  involve,  11-12. 
Industry,  protection  fiindainental,  209. 

Workmen's  compensation. 

Complexity  of  problem,  9-10. 

Need  of  uniform  laws,  10. 

Gravity  of  i)rnblem,  10. 

Xeed  (vf  invest  illation,  10-11. 

Fairness  essential,  11. 

Questions  : 

A.  On  relative  superiority  of  foreign  acts,  22. 

B.  On  uniformity  of  foreign  rates  of  compensation, 

24-27. 

C.  On  excessive  verdicts  in  Great  Britain,  228. 

D.  On  use  of  jury  trials  in,  Great  Britain,  228. 

E.  On  ratio  of  amounts  paid  on  account  of  accidents 

from  German  sickness  funds  to  those  paid  from 
German  accidents  fund,  253-4. 

F.  On  relative  advisability  of  voluntary  and  compul- 

sory compensation  laws^  256. 

G.  On  cost  of  administering  the  German  funds,  258. 

H.  On  cost  of  administering  similar  funds  in  the 

United  States,  259. 

I.  On  whether  a workmen's  compensation  law  would 

increase  the  cost  of  industrial  accidents  to  Min- 
nesota employers,  260-1. 


Ingalls  : 

Compensation,  workmen  want  it  certain,  272. 

Double  Liability,  scheme  for,  273-291. 

Workmen’s  Compensation : 

Constitutional  limitations,  291. 

Complexity  of  problem,  197,  291. 

Police  Power,  291. 

Lyman  : 

Workmen's  Compensation,  question,  217. 

Insolvenc}^  of  employer,  253. 

McEw€N,  W.  E.  : 

Accidents.  Industry  should  bear,  263. 

Ambulance  chasers,  266. 

Double  liability.  Workingmen's  attitude,  176,  178,  262- 
267. 

Increased  cost  inevitable  for  employers,  269-270. 
Limitation  in  scope  of  law,  268-9. 

Lump  sum  payments,  opposed,  268. 

State  contributions,  267. 

Workmen’s  compensation,  efforts  to  educate  working- 
men of  Minnesota,  271. 

Questions  : 

A.  On  economies  of  workmen’s  compensation,  28. 

B.  On  increasing  cost  of  liability  insurance,  30. 

C.  On  methods  by  whicli  liability  premiums  are  de- 

termined, 31. 

Mercer,  H.  Y.  : 

Constitutionality  of  Workmen's  Compensation  Acts. 

1.  Dual  form  of  government,  51-57. 

2.  The  applications  and  restrictions  of  the  Constitu- 

tion, 57. 


3.  Theory  of  Discussion,  57-G2. 

4.  The  power  of  the  state  and  oovernment, unlimited 

in  their  public  work,  G2-G3. 

5.  The  o’OTernments  of  the  United  States  and  of  the 

several  states  were  based  on  the  compact  or  con- 
tract theory,  G5-G9. 

G.  Tlie  states  have  all  ]>owers  of  independent  nations 
except  where  limited  by  the  Constitution,  79-80, 
85. 

7.  The  commerce  clause  of  the  Federal  Constitution 

grants  to  Congress  the  right  to  control  the  rela- 
tions of  Master  and  Servant  as  needed  in  inter- 
state commerce  but  does  not  deprive  the  state  of 
its  police  power  in  such  commerce,  73-74. 

8.  The  commerce  clause  does  not  take  the  police  power 

from  the  states  even  in  interstate  commerce  but 
they  still  have  the  necessary  power  for  public  pro- 
tection, 74-7G. , 

9.  The  states  execute  the  police  power  within  the 

states,  interfering  with  interstate  commerce  only 
for  public  protection,  7G-80. 

10.  The  police  power  of  the  , several  states  never  dele- 

gated to  the  Federal  Constitution  nor  prohibited 
by  the  Federal  Constitution  from  reasonable, 
equal,  state  exercise,  80-86. 

11.  The  first  ten  amendments  of  the  Federal  Constitu- 

tion apply  only  to  Federal  as  distinguished  from 
State  action,  86-89. 

12.  Jury  trial  cannot  be  avoided  in  Federal  Court  ex- 

cept perhaps  on  the  theory  of  arbitration  as  a 
condition  precedent  to  recovery,  89-91,  195-205. 

13.  The  Fourteenth  Amendment  is  a prohibition  upon 

the  States,  and  not  upon  the  National  G-overn- 
nient,  91-92. 


14.  The  privileges  and  immunities  secured  by  the  Fed- 

,eral  Constitution  are  those  given  by  that  instru- 
ment and  not  by  state  laws,  92-96. 

15.  The  equal  protection  clause  of  the  Federal  Consti- 

tution does  not  prevent  reasonable  classification 
toward  all  in  the  same  class  alike,  96-106. 

16.  The  due  proce.ss  of  law  in  the  Fifth  Amendment  ap- 

plies only  to  the  Federal  Court.  In  the  Four- 
teenth Amendment  it  is  a proliibition  upon  the 
' states,  but  it  is  not  intended  to  control  mere  forms 
of  procedure  in,  or  regulate  tlie  practice  of,  state 
courts,  106-112. 

IT.  The  Fourteenth  Amendment  is  not  violated  by  mak- 
ing the  liability  in  the  dangerous  'employment 
basis  upon  legislative  grounds  other  than  fault, 
112-118. 

IS.  The  jury  trial  provided  in  the  State  Constitution 
secures  only  riglits  iu  existence  when  the  Consti- 
tution was  adopted.  It  would  not  require  trial 
of  a compensatory  law  by  jury,  119-120. 

19.  The  common  law  liability  could  be  repealed  as  to 

future  accidents,  120,  179-180. 

20.  The  compensation  lavr  would  not  take  private  prop- 

erty for  public  use  by  reason  of  two  principles. 

(a)  Under  our  compact  theory  of  government 
all  ownership. is  subject  to  reasonable  con- 
trol, 120-124. 

(b)  The  private  individual  has  no  right  to 
complain  of  the  taking  of  bnly  so  much 
property  as  is  a protection  to  the  public, 
124-127,  68-72,  82-84,  125-126,  130-131. 

^2l.v  All  contracts  are  made  subject  to  the  police  power 
which  can  neither  be  legislated  nor  contracted 
away,  144-149. 


22.  The  legislative  departinent  first  (letc^rmines  tlie  ne- 

cessity of  sucli  legislation  (150)  and  the  courts 
look  to  that  legislation,  not  to  say  whether  they 
would  think  it  ])olicy  hnt  only  to  diderinine 
whether  there  was  a reasonable  basis  so  that  the 
legislature  had  gronnd  for  exercising  jndgnient 
as  clistingnished  from  arbitrary  ])ower,  149-150. 

23.  There  is  at  ])resent  a sufficient  basis  for  such  legis- 

lation in  dangerons  employments  to  ])revent  its 
being  arbitrary,  150-195. 

24.  Exce])t  in  dangerons  employments  the  liberty  of 

contract  is  secured  by  the  14th  Amendment  but 
under  the  princi])les  above  announced  that  lib- 
erty mnst  be  construed  as  lilu^rty  and  not  license, 
129,  145-148. 

25.  The  government  interfered  because  the  employer 

and  employe  did  not  stand  np.on  an  equality  as  to 
their  rights  to  make  contracts  in  dangerons  em- 
ployments, 130-1. 

26.  As  an  insurance  problem  the  police  power  of  the 

state  can  require  the  passage  of  a law  having  the 
effect  of  an  insurance  policy,  195-205. 

27.  This  insurance  policy  may  require  as  a condition 

precedent  to  all  suits  the  examination  of  the  ques- 
tion of  injury  by  a Board  of  Arbitration,  thus  us- 
ing a reasonable  niethod  of  estimating  and  as- 
certaining the  amount  of  the  loss,  leaving  the  gen- 
eral question  of  liability  to  be  determined  b}^  the 
court,  199-203. 

28.  The  fallacy  of  the  constitutional  objections  lies  in 

the  failure  to  appreciate  the  weight  which  must 
be  given  to  the  state  to  protect  the  public  inter- 
ests, p.  205-211. 


29.  Conclusion,  212. 

30.  Kemedy,  21G. 


Questions  : 

A.  On  increasing  cost  of  liability  insurance,  30. 

1>.  On  protection  of  small  employers,  42-3. 

C.  On  success  of  British  Act,  227. 

T).  On  means  of  compelling  accident  preventions;  12. 

Xeill,  Chas.  P.  : 

Accidents,  Causes,  6. 

Ambitlance  chasers,  36. 

Compensation,  Properly  a cost  of  production,  6-8. 
America’s  backwardness,  5. 

C(vst,  under  German  rates,  261. 

Double  Liability,  217-18. 

Employers’  Obligations  purely  economic,  49. 

Employer's  liability,  5. 

Origin,  5. 

Ilazards  of  industry,  borne  by  workers,  5-6. 
Investigations  proposed  b^^  the  United  States,  217. 
Investigations,  duplicate,  49. 

State  contributions,  49. 

Uniform  legislation,  8. 

Wages,  in  hazardous  occupations,  7. 

Workingmen’s  compensation,  3,  6,  4-8,  49,  217. 
Desirability,  4-8. 

Difficulties,  7. 

Economies,  217. 

Limitation  of  scope  of  law,  147. 

Parsons,  A.  W. ; 

Double  liability,  27,  252. 

Employer's  liability. 


Tendencies  in  Annn'ica.n  I(\i*islal  inn,  !),  »‘>2. 

\Vastes,  31. 

Kecnv(‘ries  more  nnnierons,  30. 

Insurance. 

Cninpanies  avoid  suits,  3i. 

Workmen’s  comi)ensation. 

Tamitatinns  iii  scope,  252. 

Petkascii,  Caul  S. : 

Insurance. 

Iveas(Mis,  eom])anies  Lvoid  suits,  32. 

Rowe,  J.  S.  : 

Double  liability,  29. 

Employers’  liability,  more  expensive,  30;  recoveries  in 
creasinjy,  30. 

Insurance;  companies  avoid  suits,  31. 

Methods  of  fixinir  nremiums.  30-31. 

S EAGER : 

Questions  on  foreign  laws,  258. 

New  York  commission,  functions  of,  2T4-G. 

Workmen’s  compensation,  constitutional  difficult  es,  2TG 

8mith  : 

Necessit}^  of  protecting  industrv.  292. 

Stone : 

Double  liability,  253. 


/ 


29.  Conclusion,  212. 

30.  Reined}^,  216. 


Questions  : 

A.  On  increasing  cost  of  liability  insurance,  30. 

B.  On  protection  of  small  emploj^rs,  42-3. 

C.  On  success  of  British  Act,  227. 

I).  On  means  of  compelling  accident  preventions,  12. 

Xi:iLL,  Chas.  P.  : 

Accidents,  Causes,  6. 

Ambulance  chasers,  36. 

Compensation,  Properly  a cost  of  production,  6-8. 
America’s  backwardness,  5. 

Cost,  under  German  rates,  261. 

Double  Liability,  217-18. 

Employers'  Obligations  purely  economic,  49. 

Employer’s  liability,  5. 

Origin,  5. 

Hazards  of  industry,  borne  by  workers,  5-6. 
Investigations  proposed  by  the  United  States,  217. 
Investigations,  duplicate,  49. 

K^tate  contributions,  49. 

Uniform  legislation,  8. 

Wages,  in  hazardous  -occupations,  7. 

SIX  INDEX 

Workingmen’s  compensation,  3,  6,  4-8,  49,  217. 
Desirabilitv,  4-8. 

Difficulties,  7. 

Economies,  217. 

Limitation  of  seope  of  law,  147. 

Parsons,  A.  W. : 

Double  liability,  27,  252. 

Employer's  liability. 


Tendencies  in  American  l(^<»islati()n,  0,  32. 

Wastes,  31. 

Recoveries  more  nnmerous,  30. 

Insurance. 

Companies  avoid  suits,  31. 

Workmen’s  compensation. 

Limitations  in  scope,  252. 

Petr  ASCII,  Carl  S.  : 

Insurance. 

Reasons,  companies  avoid  suits,  32. 

Rowe,  J.  S.  : 

Double  liability,  29. 

Employers’  liability,  more  expensive,  30;  recoveries  in- 
creasing, 30. 

Insurance;  companies  avoid  suits,  31. 

Methods  of  fixinir  oremiums.  30-31. 

SeaCxER  : 

Questions  on  foreign  laws,  258. 

New  York  commission,  functions  of,  274-6. 

Workmen’s  compensation,  constitutional  difficulties,  276. 

Smith  : 

Necessity  of  protecting  industry,  292. 

Stone  : 

Double  liability,  253. 


